Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

CARDIFF EXTENSION BILL

(King's Consent, on behalf of the Crown, signified.)

Bill read the Third time, and passed.

TOWYN TREWAN COMMON BILL

(King's Consent, on behalf of the Crown, signified.)

Bill read the Third time, and passed.

BATH EXTENSION BILL [Lords]

To be read a Second time Tomorrow.

Oral Answers to Questions — NATIONAL INSURANCE

Reserve Fund (Securities)

Sir John Mellor: asked the Minister of National Insurance why the book values of the securities of the National Insurance (Reserve) Fund are described in the 1948–49 accounts as cost price, when in fact they were market values on 5th July, 1948, at which date depreciation of the absorbed funds amounted to £12,867,972; and when this will be corrected.

The Minister of National Insurance (Dr. Edith Summerskill): The hon. Member is under a misapprehension. These securities are shown in the accounts of the National Insurance (Reserve) Fund for 1948–49 at market value as on 5th July, 1948.

Sir J. Mellor: That is utterly incorrect. It gives the cost price. Will the right hon. Lady explain why the expression "Cost price" is used for a column of figures which bear no relation to cost prices?

Dr. Summerskill: The hon. Baronet really must not make these statements in such an emphatic way. Here are the accounts. He has a copy in his hand. If he looks on page 10 under "Receipts" he will see "Investments transferred at market value as at 5 July, 1948." I suggest that in future he reads the accounts carefully.

Sir J. Mellor: Will the right hon. Lady look at page 12 with its "Statement of Securities, &c., held at 31 March, 1949," where she will see, in the middle column headed "Cost price," the figures I have mentioned?

Dr. Summerskill: The hon. Baronet alleges that the accounts do not contain the market value, and I have pointed out that it is given on page 10. If he looks through the whole of the accounts, he will probably find that this sum is mentioned on other pages. I must remind him and the House that he fell into the same error last week, simply because he refrained from reading the document.

Mr. Assheton: Will the right hon. Lady be good enough to consult the Treasury on this matter, when I think she will find there is some substance in the contention of the hon. Baronet? The heading of this column is certainly open to grave misinterpretation.

Dr. Summerskill: I think the right hon. Gentleman will agree that I have to address myself to the Question. He will find that the answer I have given is perfectly correct.

Mr. Touche: Will the right hon. Lady say what is the loss on revaluation and where it is accounted for?

Dr. Summerskill: Certainly. It is in the accounts, if the hon. Gentleman cares to read them.

Mr. Assheton: Will the right hon. Lady be good enough to consult the Treasury, because if she does I think she will find that they substantially agree with the point made by the hon. Baronet?

Dr. Summerskill: With due respect, the right hon. Gentleman cannot teach me my job. I have read the Report of the Public Accounts Committee, in which I know the hon. Baronet takes a great interest. I understand the position perfectly well. The fact is that the hon.


Baronet, I think, is a member of the Public Accounts Committee and he did not attend the meeting. In future, if he attends the meetings, he will not fall into these errors.

Mr. Assheton: Will the right hon. Lady be good enough to recollect that I did attend the meeting?

Dr. Summerskill: I cannot answer that question.

Mr. Quintin Hogg: Does the right hon. Lady remember, from her experience at the Ministry of Food, that points are one thing and personal points are another, and it is the former rather than the latter that we expect from the Minister at Question Time?

Sir J. Mellor: On a point of order. Is the right hon. Lady in order in referring to the proceedings of a Committee which has not yet reported to the House?

Mr. Speaker: The fact is that a Report of a Select Committee which has not been reported to the House should not be quoted here.

Dr. Summerskill: I am referring to the accounts before me, before the hon. Baronet and before the whole House.

Dupuytren's Contraction

Mr. Snow: asked the Minister of National Insurance whether she will now take steps to prescribe dupuytren's contraction under Section 55 of the Industrial Injuries Act, 1946, in view of the case of Mr. John Kiley of 12 Green Lane, Rugeley.

Dr. Summerskill: The claim of Mr. Kiley is now before the Industrial Injuries Commissioner on appeal and I am, therefore, unable to comment on any implications it may have.

Mr. Snow: Will my right hon. Friend ask the Commissioner to show more expedition in this case which has been before him for a long time; and, secondly, will she consider, in view of the need to provide more evidence about the incidence of this disease, circularising the trade union medical authorities to try to secure further evidence, so that she may prescribe it in the Act?

Dr. Summerskill: I would ask my hon. Friend to ask any trade union with which

he is in contact to furnish me with particulars of any case, and I shall be only too happy to look at it. I would remind him that the regional officer in Birmingham has furnished my Department so far with only one case.

Industrial Injuries (Assessments)

Dr. Barnett Stross: asked the Minister of National Insurance (1) by what means a workman, insured under the Industrial Injuries Act, who is unable to appeal against a provisional assessment within two years of its being made, can obtain information as to the reasons for the findings of the medical board;
(2) whether she is aware that in some cases of industrial injury, medical boards make a provisional assessment coupled with an estimation of loss of faculty, terms offset, or not due to the injury itself; and whether she will give instructions that in every such case a full diagnosis be given to the injured workman or his trade union representative.

Dr. Summerskill: Under the regulations claimants for disablement benefit receive written summaries of the Medical Boards' findings. Subject to a few exceptions made on medical advice in the claimant's own interest, these summaries should include the diagnosis of abnormal conditions, whether or not they were caused or made worse by the accident. If my hon. Friend has any particular case in mind perhaps he will bring it to my attention.

Dr. Stross: While thanking my right hon. Friend for that very helpful answer, is she aware that there are cases that exist where these provisional assessments are made, and during the two years information is refused to the injured workman or to his trade union advisers?

Dr. Summerskill: No, but I think that I can undertake, if my hon. Friend has any case in mind, for the summaries which are given in the initial stage to be amplified, so that no information is withheld from any man who is anxious to have it.

Dr. Stross: asked the Minister of National Insurance whether she is aware that a workman injured at work is unable to appeal against an assessment of his loss of faculty except on the question whether the loss of faculty is likely to


be permanent or not; that the insurance officer has a right to appeal, although the workman has not; and what alteration in the regulations is contemplated in order to remedy this disparity.

Dr. Summerskill: My hon. Friend no doubt has in mind rights of appeal against provisional assessments. These are limited by the Statute, but I am watching the working of the relevant provision with special care.

Quarantine (Insurance Certificates)

Major Howard Johnson: asked the Minister of National Insurance whether she is aware that a certificate given by a general medical practitioner placing a person in quarantine cannot be accepted for a benefit claim; and, in view of the fact that this casts a slur upon such a practitioner, whether she will take the steps necessary to amend the National Insurance (Unemployment and Sickness Benefit) Regulations in this respect.

Dr. Summerskill: The Medical Officer of Health is responsible for action to prevent the spread of infectious disease, and it is in accordance with the recommendation of the National Insurance Advisory Committee that he is also the authority for the issue of insurance certificates in these cases. This implies no slur on general practitioners and I see no reason to alter the present provision.

Major Johnson: Is the right hon. Lady aware that when persons are placed in quarantine they are supposed to isolate themselves, and is it, therefore, a wise policy to require such persons to travel all over the town, probably by public transport, to locate the local medical officer of health in order to obtain two certificates—one from their own practitioner and one from their own local medical officer?

Dr. Summerskill: When an individual is in quarantine in a household there must be a person in the same house who is suffering from an infectious disease, and the sequence of events is this: the individual suffering from the infectious disease obtains a certificate in the first place, and a nurse probably calls at the house within the next 48 hours. As the medical officer of health has to certify the condition for the sake of the person in

quarantine, it is quite possible for him to obtain a certificate from the medical officer who calls to see the patient.

Major Johnson: Will the Minister undertake to see that something is done to facilitate the obtaining of the certificate from the local medical officer of health, because I assure the Minister that persons are having difficulty in finding the local medical officer of health and obtaining his certificate? Could some circular be issued to facilitate the procedure?

Dr. Summerskill: I do not understand the hon. and gallant Gentleman's objection. I understood that he objected to these certificates being given by the medical officer, and now he is asking me to facilitate this.

Major Johnson: I was satisfied with the Minister's explanation. I now want her to advertise it locally so that it is made easy for persons to obtain the certificate of the local medical officer of health. I am quite satisfied with her explanation as to why it is necessary; now I want her to facilitate the procedure.

Dr. Summerskill: The person who knows it is the general practitioner, and he tells the patient who is suffering from the infectious disease, and the patient then tells his relation.

Oral Answers to Questions — EMPLOYMENT

Factory Acts (Nationalised Industries)

Mr. Nabarro: asked the Minister of Labour the number of prosecutions initiated during each of the years 1948 and 1949 by the Inspectorate of Factories, in respect of contraventions of the Factory Acts by nationalised industries, and the aggregate of fines imposed.

The Parliamentary Secretary to the Ministry of Labour (Mr. Frederick Lee): In 1948 there were four prosecutions against nationalised undertakings out of a total of 891, and in 1949, nine out of 1,080. The aggregate fines were £86 and £148 5s. respectively.

Mr. Nabarro: In spite of the very small aggregate total of these fines, does the Minister realise that when such a fine is imposed on nationalised industries it is tantamount to fining the community and


the taxpayer, and, what does he propose to do to remedy this anomalous and slightly ridiculous position?

Mr. Lee: I do not accept that there is any anomalous position whatever.

Restrictive Practices (Report)

Mr. Lionel Heald: asked the Minister of Labour why he has not yet made available the Report of the National Joint Advisory Committee on Restrictive Practices, in view of the fact that this Report was ready for presentation on 30th March.

Mr. Lee: My right hon. Friend regrets that through inadvertence his reply to the hon. Member's supplementary question of 30th March incorrectly stated the position. In fact the matter was still under the consideration of the parties and that is the present position.

Mr. Heald: Having regard to the delay of more than seven months since the Minister first promised to obtain t port, does he not now think that it would be a good thing to accede to the suggestion I made on 30th March that there should be an independent inquiry into this matter?

Mr. Lee: No, Sir.

Mr. Joynson-Hicks: Is not this a matter which is not taken with sufficient seriousness by the hon. Gentleman? He first misleads the House and then says that he is not going to do anything about it.

Mr. Lee: I do not accept the word "mislead" in that connection. It is true that my right hon. Friend tried to give information to the House in a supplementary answer, and neither he nor, I think, any other hon. Member would claim infallibility.

Production Methods (Mechanisation)

Sir George Harvie-Watt: asked the Minister of Labour whether he has taken any steps to educate workers in industry on the advantages of greater mechanisation and thereby reduce opposition when improved methods of production are introduced.

Mr. Lee: This is a matter that concerns the two sides of industry and my right hon. Friend has been giving every

support and encouragement to the establishment of joint consultative machinery through which such questions are discussed and the understanding and cooperation of the workpeople obtained.

Sir G. Harvie-Watt: Is the hon. Gentleman aware that recently there have been many cases in industries like the tobacco industry and at the docks where there have been some labour suspicions and fears regarding the introduction of mechanical aids to industry? This is a matter for both sides of industry, and will the Minister assure us that he will do more to get the two sides together by cooperation and education?

Mr. Lee: I accept the point which the hon. and learned Gentleman makes. We do everything in our power, but he must realise that mechanisation is going ahead at such a momentum that it is necessary to carry the people with us and not to impose this kind of thing; otherwise we shall have trouble in industry.

Disabled Tuberculous Persons

Mr. Pargiter: asked the Minister of Labour (1) when he will be able to publish his arrangements for the provision of employment facilities for tuberculous disabled persons;
(2) whether he is aware that, without avail, repeated requests have been made to his Department for a clear expression of the respective responsibilities of the central and local authorities with regard to persons suffering from tuberculosis; and if he will now make a statement on this matter.

Mr. Lee: I assume that my hon. Friend is referring to the provision in the Disabled Persons (Employment) Act which enables my right hon. Friend to make payments to a local authority having powers under any other enactment to provide facilities for the employment of severely disabled persons, including the tuberculous. Certain questions relating to the powers under which local authorities can provide such facilities are being considered inter-departmentally and a statement will be made in due course.
As regards the provision of employment facilities generally, disabled tuberculous persons who are available or work are submitted to any employment which is regarded, on medical advice, as within


their capacity and in other respects suitable for them. In addition, Remploy, Limited, have at present five special factories which employ them in sheltered conditions.

Mr. Pargiter: Is my hon. Friend aware that this inter-departmental inquiry has been going on for so long that the local authorities are very much of the opinion that the delay is due to the desire of the central authority not to meet their just liabilities and responsibilities in this matter and to leave them with the local authorities?

Mr. Lee: I assure my hon. Friend that that is not the case.

Lieut.-Colonel Sir Thomas Moore: Will not the Minister arrange for the appropriate trade unions to issue cards to these disabled people so that they can be taken into work alongside trade union members?

Mr. Lee: Generally speaking, the trade unions do that.

Joint Consultation

Mr. Richard Winterbottom: asked the Minister of Labour in view of the wide interest in the subject of joint consultation, what steps he is taking to bring the subject more closely to the attention of management and workpeople.

Mr. Lee: I would refer my hon. Friend to the Debate on 5th April, 1950. In addition, my right hon. Friend has had a booklet prepared, in which are discussed, in the form of question and answer, the various matters arising on a wider extension throughout industry of the machinery of joint consultation. I am glad to say that both the British Employers' Confederation and the Trades Union Congress, together with a number of voluntary organisations, are giving the most valuable help in securing the widest possible distribution for it, and I am placing copies in the Library for the information of Members.

Mr. Winterbottom: While thanking my hon. Friend for his reply, may I ask whether practical experience has been taken into consideration in the compilation of this pamphlet?

Mr. Lee: Yes, Sir. The booklet is a record of a discussion by three industrial

workers with practical experience of how joint consultation works and what it can mean, given goodwill and co-operation on both sides.

Major Tufton Beamish: Will the Parliamentary Secretary give an assurance that he will not take as a yard-stick in this matter the joint consultative machinery which exists between the Government and the Socialist Party Executive?

Taxicab Drivers, London (Dispute)

Mr. C. S. Taylor: asked the Minister of Labour if he will make a statement about the strike of London taxicab drivers; and if he will give the numbers of those still on strike.

Mr. Lee: This dispute has not been reported to my Department and, on the facts as known to me, I am advised that this is not a strike within the meaning of the Conditions of Employment and National Arbitration Order, as the relationship between the cab proprietors and the drivers is not that of employer and employed. I have no information as to the numbers involved.

Mr. Taylor: Is it not a fact that this is an official strike recognised by the trade union?

Mr. Lee: I have nothing to add to what I have said, that so far as we are concerned it is not.

Mr. Taylor: Will the Parliamentary Secretary make inquiries and find out some facts about this strike?

Mr. Lee: I am quite certain that the answer I have given is the correct one, and that it does not, under the provisions of Order 1305, become a strike.

Sir G. Harvie-Watt: Has the Parliamentary Secretary not heard that this strike has been very largely brought about by Communist agitation, and has he no statement to make about that?

Mr. Lee: No, Sir. I have no information to that effect. The point of my reply is that the relationship between the cab owners and the drivers is not that of employer and employee. It is only under such conditions that we could intervene.

Pembrokeshire

Mr. Donnelly: asked the Minister of Labour (1) what was the number of unemployed in Pembroke. Milford Haven, Haverfordwest, Fishguard and Tenby, at the last convenient date;
(2) what was the total number of unemployed in Pembrokeshire at the last convenient date.

Mr. Lee: The total number of unemployed persons on the registers of employment exchanges in Pembrokeshire at 15th May was 806. The figures for the Pembroke Dock, Milford Haven, Haverfordwest, Fishguard and Tenby employment exchanges were 204, 319, 119, 54 and 82, respectively.

Mr. Donnelly: As this figure represents something like twice the national average in terms of percentages, will my hon. Friend consult his colleague and ask him to bring this unemployment to the notice of the President of the Board of Trade with a view to directing new industries to this country?

Mr. Lee: indicated assent.

Compositors, London (Dispute)

Major Legge-Bourke: asked the Minister of Labour, seeing that he has referred a dispute between the London Society of Compositors and the London Master Printers' Association to the National Arbitration Tribunal, what steps he has taken to stop the London Society of Compositors from using restrictive practices and from using trade union procedure in furtherance of that dispute, pending a decision by the Tribunal.

Mr. Lee: My right hon. Friend has no authority to intervene in these matters.

Major Legge-Bourke: In view of the fact that the Minister of Labour himself played a considerable part in building up the joint industrial council for this trade, will he not consider taking action to try to dissuade the compositors from breaking away from the council, which they have notified they intend doing?

Mr. Lee: What my right hon. Friend can do in a private capacity is one thing, but what he can do as Minister of Labour is another.

Several Hon. Members: rose—

Mr. Speaker: If the Minister has no authority, I do not see how he can answer.

Military Service

Mr. Alport: asked the Minister of Labour whether any decision has yet been reached regarding the terms under which service in the Regular Forces may be counted as established service in subsequent civilian employment when calculating the latter for purposes of redundancy.

Mr. Lee: No, Sir. The matter is at present being examined with a view to putting forward proposals which, it is hoped, will be found acceptable to all concerned.

Mr. Alport: Does the Parliamentary Secretary realise that this matter is of concern, not only from the point of view of equity to those affected, but also in regard to future recruiting for the Regular Army?

Mr. Lee: That is precisely the reason we are hoping to find a solution satisfactory to all concerned.

Mr. Stanley Prescott: Is the reply confined to those who take up employment in Government Departments and nationalised industries, or does it apply to industry in general?

Mr. Lee: If the hon. Gentleman reads the Question, he will see to what the answer refers.

Training Centre, Paulsgrove (Cost)

Brigadier Clarke: asked the Minister of Labour the cost of building the redundant building training centre at Paulsgrove in terms of pounds, shillings and pence per man trained.

Mr. Lee: My right hon. Friend the Minister of Works informs me that the cost of building and equipping the premises was £177,500. Whilst the premises were in use as a Government training centre, 436 persons completed training courses there. The relation of these figures to one another does not, of course, represent the cost of a man's training, in the calculation of which quite different factors must be taken into account.

Brigadier Clarke: Does not the Parliamentary Secretary realise that this redundant building has been empty since January, that it cost an awful lot, that it has trained very few people and that it is not now being used for any purpose? Will he arrange to allocate it to some factory, or to have it used for some other purpose?

Mr. Lee: It is not our wish that the factory should remain vacant. I do not know whether there are any proposals for letting it to industry, but I should like to think that that is going to be the case.

Mr. Godfrey Nicholson: Does the Parliamentary Secretary admit that it is redundant?

Mr. Lee: I do not know precisely, but I have no reason to dispute the hon. and gallant Member's statement that at the moment it is not being used.

Mr. R. S. Hudson: Is this not yet another example of Socialist extravagance?

Mr. Lee: I do not think it is extravagance. These buildings have to be paid for.

Oral Answers to Questions — SCOTLAND

Housing, Prestwick

Sir T. Moore: asked the Secretary of State for Scotland, in view of the fact that the Burgh of Prestwick is short of 650 houses to meet the needs of the homeless, what plans he proposes to enable the town council to overcome the shortage.

The Joint Under-Secretary of State for Scotland (Mr. Thomas Fraser): I understand that the building industry in this area is already fully engaged, but I shall be glad to consider any proposals from the council or the hon. and gallant Member to increase production.

Sir T. Moore: But the Joint Under-Secretary knows very well that the council themselves have put forward suggestions for the last five years. Will he tell us the cause of this tragic position of housing in Prestwick and Scotland generally? Is it because Scotland is not getting its fair share of materials, or what is the reason?

Mr. Fraser: The hon. and gallant Member will know that at Prestwick they have 28 houses under construction, and

that 76 additional houses have been allocated but not yet begun. The only sort of representation that the hon. and gallant Member has made up to now is to allocate more houses, or to allow more houses to be built on private account. In addition to these houses, they also have about 20 houses being built on private account.

Commander Galbraith: Can we be told, in the light of these figures, how long it will take Prestwick to get the 650 houses promised?

Sir William Darling: In view of the reply, does the Joint Under-Secretary admit that the local authority has failed as the chosen instrument for house building?

Mr. Fraser: The hon. and gallant Member is asking me to assist the chosen instrument to build more houses, and I am wondering why they have not built more houses out of their allocation.

Fishermen (Houses)

Sir T. Moore: asked the Secretary of State for Scotland what is his policy in regard to the provision of houses for fishermen; and if they will have any priority, as compared with other housing requirements.

Mr. T. Fraser: As explained in a recent letter to the hon. and gallant Member, my right hon. Friend is ready to consider the special circumstances of particular fishing areas where housing difficulties are hampering recruitment to the industry from other areas. Twenty additional houses have just been allocated to Ayr County Council for this special purpose.

Sir T. Moore: The hon. Member will appreciate that there is great disquiet among the fishing population as to whether they are not being overlooked or left behind in this scramble for the houses that do not exist. Will he therefore do something to try to ease the concern which is at present disturbing them?

Mr. Fraser: I understood that the scramble is for the houses that do exist. The selection of tenants for houses is a matter for the local authorities concerned. We are concerned only to allocate additional houses where there is to be an increase in the population.

Research in Education (Grant)

Mr. Hamilton: asked the Secretary of State for Scotland what amount of assistance he proposes to give to the Scottish Council for Research in Education in the current financial year.

The Joint Under-Secretary of State for Scotland (Miss Herbison): The Council's grant is the sum by which the cost of then-approved programme of work exceeds their income from other sources. The estimate of their requirements for their current financial year has not yet been received, but the grant for their last financial year will be about £1,950.

White Fish Industry

Mr. Henderson Stewart: asked the Secretary of State for Scotland if he can now state his conclusions on the present state and future prospects of the fishing industry following upon decontrol of prices, abandonment of the flat rate transport scheme and the continuing rise in costs of fishing gear; and what action he proposes to take to preserve the vitality and the defence potential of the industry.

Mr. T. Fraser: I cannot add to what the Prime Minister said last week, that a statement will be made as soon as possible.

Mr. Stewart: Would the hon. Gentleman kindly answer the first part of the Question—whether he has reached any 'conclusion? Are we to take it that he has reached no conclusion?

Mr. Fraser: If we had reached conclusions we should be able to make a statement and we should make a statement. It is a very serious matter, it is being very fully, carefully and urgently considered, and as soon as possible a statement will be made.

Mr. Grimond: Can the Joint Under-Secretary of State say whether this inquiry covers both sides of the fishing industry? Will his statement cover both the herring industry and the white fish industry?

Mr. Fraser: No. This is an inquiry into the white fish industry.

Captain Duncan: Can the hon. Gentleman give any idea of the date when the Government's conclusions will be reached?

Mr. Fraser: No.

Housing Survey

Mr. Henderson Stewart: asked the Secretary of State for Scotland what progress has been made with the housing survey; if the reports on county and burgh surveys are to be published separately as they are completed; and to what extent the survey is designed to show the amount of useful repair and renovation work which can quickly be done to existing houses in town and country.

Mr. T. Fraser: My right hon. Friend has asked the associations of local authorities for their views on the making of this survey. It will not be possible to give any details until the associations have considered the matter.

Mr. Stewart: Are we to understand that after the associations have provided recommendations to the Minister, he will then come to conclusions on this matter?

Mr. Fraser: The position is that we are not entitled to go forward to make a survey without the co-operation of the local authorities. We are consulting with the local authorities' associations at the present time. It would be unfair of me to state any details, even of any schemes which we have put forward, until we have had those discussions with the authorities.

Dunragit Estate, Wigtownshire (Profit)

Mr. McKie: asked the Secretary of State for Scotland on what basis of computation the profits on the estate of Dunragit, Wigtownshire, owned by the Department of Agriculture for Scotland for 1948–49 were arrived at.

Mr. T. Fraser: The trading profit for Dunragit for the 16 months ended 31st March, 1949, was computed on the value of farm assets as at 31st March, 1949, plus income during the period of accounts, less the value of farm assets as at 1st December, 1947, and expenditure during the period of accounts.

Mr. McKie: Is the hon. Gentleman satisfied that a completely normal course was followed on this occasion and that there was no tendency at all to exaggerate the value of the assets?

Mr. Fraser: Not at all. As a matter of fact, at the latter date the value of the assets was placed at a lower figure than at the former date.

House, Kirkcudbright (Cost)

Mr. McKie: asked the Secretary of State for Scotland the cost of the house recently completed for the Stewartry of Kirkcudbright County Council's road engineer at Kirkcudbright.

Mr. T. Fraser: According to a statement submitted to the county council the house, excluding the garage, cost £1,374 to build, the plumbing and electrical work having been done by the road engineer himself.

Mr. McKie: Is the Minister aware that there is great dissatisfaction in the district at the cost of this house and that many people believe that it far exceeded the legitimate amount? Will the hon. Gentleman indicate his displeasure and his disapproval of this kind of thing done on behalf of our civil servants?

Mr. Fraser: Of course, this matter has been very carefully considered by a committee of the county council. The committee of the county council were satisfied that everything was fair, square and above board, and I do not think we have any right to criticise.

Afforestation, Kirkcudbright

Mr. McKie: asked the Secretary of State for Scotland how much of the 83,000 acres owned by the Forestry Commission in the Stewartry of Kirkcudbright has been planted; and what sheep stock there is on the non-planted area.

Mr. T. Fraser: A total of 18,664 acres are planted. The sheep stock on the un-planted land, as shown in the Agricultural Returns for June, 1949, was approximately 15,500 ewes and 18,500 others.

Mr. McKie: May I ask the Joint Under-Secretary of State whether he is aware that there has been a decrease in the sheep population in this county of about 70,000 in the last 10 years and that that is due quite largely to this very large planting of trees? Is he aware of the necessity of holding a balance between afforestation and sheep production?

Mr. Fraser: That is exactly what we are doing. The fall in sheep stock is not due, in fact, to the acreage which has been planted and, as the hon. Member will know, the cattle population in the same area has increased quite considerably.

Advisory Council on Education (Report)

Lieut.-Commander Clark Hutchison: asked the Secretary of State for Scotland when the Report on Public Libraries and other cultural services in Scotland will be published.

Miss Herbison: My right hon. Friend has impressed upon the council the urgency of this Report. I understand that its preparation is well advanced and that it should be submitted to the Secretary of State in the autumn. It will be published as a Command Paper.

Lieut.-Commander Hutchison: Is the hon. Lady aware that as long ago as 22nd November the Secretary of State said that the Report was then being drafted? Is not the delay quite abnormal?

Miss Herbison: The Report is not ready for drafting even at the present time. The Committee are still dealing with this matter. We have urged upon them the necessity for getting the Report out quickly and we are almost certain that it will be out in the autumn.

Lieut.-Commander Hutchison: Arising out of that reply, may I call the hon. Lady's attention to column 184 of HANSARD of 22nd November last, when the Secretary of State said that the Report was then being drafted?

Miss Herbison: All I can say is that the information I have given to the hon. and gallant Member today is the correct information.

Tenancy of Shops Act (Extension)

Lieut.-Commander Hutchison: asked the Secretary of State for Scotland whether he is now in a position to make a statement about continuing the Tenancy of Shops (Scotland) Act, 1949, for a further period of five years.

Mr. Carmichael: asked the Secretary of State for Scotland if he will make a statement on the final Report of the Committee of Inquiry into the Tenure of Shop and Business Premises as presented in Commander Paper No. 7903; and if he proposes early legislation on this subject of security of tenure.

Miss Herbison: My right hon. Friend and the President of the Board of Trade


have considered the final Report of the Guthrie Committee and it has been decided to ask Parliament to extend the operation of the Tenancy of Shops (Scotland) Act, 1949, beyond 31st December next by means of the Expiring Laws Continuance Bill.

Mr. Carmichael: May I ask my hon. Friend whether she is including business premises, in addition to shops, in this new arrangement?

Miss Herbison: No. What is to go into the Expiring Laws Continuance Bill will cover only those points covered by the existing Act.

Teachers' Widows (Pensions)

Lieut.-Commander Hutchison: asked the Secretary of State for Scotland when he expects to be able to make a statement on the possibility of introducing a scheme to provide pensions for the widows of teachers.

Miss Herbison: The difficult financial problems involved in any scheme of pensions for the widows of teachers require careful consideration and should be examined in the light of the results of the actuarial inquiry into the Teachers' Superannuation Scheme now proceeding. It will, therefore, be some little time before a further statement can be made.

Lieut.-Commander Hutchison: Will the hon. Lady indicate when the results of the actuarial inquiry are likely to become known?

Miss Herbison: We hope that the report will be ready by the end of this year.

Mr. Niall Macpherson: Will the hon. Lady tell us why this matter has not been considered at all in the last five years? Why is consideration only now being started?

Miss Herbison: This Committee has been sitting for some time. This subject has been the concern of the Department for a considerable time but no steps can be taken until the report of the Committee is ready.

Mr. Hamilton: Can the hon. Lady say why it was not dealt with by hon. Members opposite between the wars?

Water Supplies, Skye and Outer Islands

Lord Malcolm Douglas-Hamilton: asked the Secretary of State for Scotland when it is proposed to make a start for the first phase water supply schemes for Skye and the Outer Islands.

Mr. T. Fraser: A start has not been made with these schemes because the county council are dissatisfied with the rate of grant recently offered to them. My right hon. Friend hopes to make a revised offer of grant at a very early date.

Lord Malcolm Douglas-Hamilton: Will the hon. Member remember that the best season for the building of water supplies is very short? Can he say when it is expected that the negotiations between the county council and the Department for the 85 per cent. grant will be concluded?

Mr. Fraser: I do not know that there will be any 85 per cent. grant. They were recently offered a 40 per cent. grant; they had expected an 85 per cent. grant; and we have had a discussion recently. We hope in the next week or two to be able to offer them a modified grant, but I cannot say what it will be.

Mr. Malcolm MacMiilan: Is it the case that part at least of the reason for the reduction of the grant from 85 per cent. to 40 per cent. is that the council indecently rushed to reduce its rates last year and reduced the value of its own contribution?

Lord Malcolm Douglas-Hamilton: Was it not true that there was confusion between the county rate and the water rate in the Department?

Mr. Fraser: The 85 per cent. which was expected in the first place was calculated on the basis of the rate burden on the authority before the introduction of the equalisation grant provision. Since the rate of the grant had to be fixed after the operation of the equalisation grant provisions, under which the county council are very generously treated by the Government, it was found that the rate of the grant would properly be fixed at 40 per cent. and the local authority were not willing to accept that.

Freight Charges (Farmers)

Lord Malcolm Douglas-Hamilton: asked the Secretary of State for Scotland whether he is aware that the burden of increased freights falls most heavily on certain farmers in the Highlands; and what measures he is taking to compensate for this inequality.

Miss Herbison: I am aware of many complaints that freight charges have an adverse effect on various industries in the Highlands, including agriculture. This problem is being considered by a Joint Committee of the Scottish Council, the Highland Panel and the Scottish Board for Industry, with special reference to the draft charges scheme now being prepared by the British Transport Commission.

Lord Malcolm Douglas-Hamilton: Can the hon. Gentleman say when the report of this Committee will be ready, and will she bear in mind, in the meantime, that the transport rates bear very heavily on the remote hill farmers at the present time?

Miss Herbison: At this stage I cannot give any date when this report will be ready, but we hope it will be ready soon so that it can go before the British Transport Commission.

Sheep Sale, Stirling

Lord Malcolm Douglas-Hamilton: asked the Secretary of State for Scotland whether he is aware that agents of the Department of Agriculture for Scotland bid against each other recently at a sheep sale at Stirling; and if he will issue instructions to prohibit this practice.

Mr. T. Fraser: I am not aware of such an instance but I shall be glad to have particulars. Instructions already exist to avoid such occurrences.

Lord Malcolm Douglas-Hamilton: Is the hon. Gentleman aware that this took place in September, 1948, when six agents of the Department were bidding against each other?

Mr. Fraser: The noble Lord will appreciate why it was that I was unable to identify the occasion. Now he has stated it, I will make some inquiries. I should be obliged if he could possibly be even more precise.

Illegal Salmon Fishing (Legislation)

Colonel Gomme-Duncan: asked the Secretary of State for Scotland what action His Majesty's Government propose to take on the Report of the Committee on Poaching and Illegal Fishing of Salmon and Trout in Scotland.

Mr. William Ross: asked the Secretary of State for Scotland whether His Majesty's Government have completed their consideration of the Report of the Committee on Poaching and Illegal Fishing of Salmon and Trout in Scotland; and what action it is proposed to take.

Mr. T. Fraser: The Government have given careful consideration to the Committee's Report, and they propose to introduce legislation on the general lines suggested by the Committee.

Colonel Gomme-Duncan: May I ask the Joint Under-Secretary whether this legislation is likely to be introduced very soon? The Lord President of the Council did not seem very optimistic about it on Thursday.

Mr. Fraser: I should think that he is the member of His Majesty's Government who might be consulted about the matter.

Mr. Ross: Will my hon. Friend impress upon the Lord President the urgency of the matter?

Mr. Fraser: Yes, Sir.

Mr. James Stuart: Will the hon. Gentleman also take into account the fact that this is an admirable opportunity to deal with all sides of this question of the salmon fishing industry, and that he should not confine the Bill to the Report? Will he consider that point?

Mr. Fraser: I shall ask my right hon. Friend to bear that point in mind.

Mr. Emrys Hughes: Is my hon. Friend aware of the strong opinion in Scotland that there should be nationalisation of the fishing rights, without any compensation to the landlords?

Lord Dunglass: In impressing upon his right hon. Friend that this is an urgent matter, will the hon. Gentleman also point out that in the next few months, when the rivers are at their lowest and the fish are congregating in the head waters of the


rivers to spawn, they are really most vulnerable? This poaching with poisoning and explosives is a new thing. Is the hon. Gentleman aware that if the use of these methods is allowed to continue on this scale into the autumn, it will do great damage to stocks during the next few years?

Mr. Fraser: This is a very old form of private enterprise. I cannot give any undertaking that legislation will be passed to deal with it in the next few months.

Lieut.-Colonel Elliot: Would it not be more correct to call it "expropriation" than "nationalisation"?

Finance and Economics (Inquiry)

Colonel Gomme-Duncan: asked the Secretary of State for Scotland if he can now announce the names and terms of reference of the committee he proposes to set up for the purpose of inquiring whether it is possible to inquire into the financial and other relations between Scotland and England.

Mr. Henderson Stewart: asked the Secretary of State for Scotland if he will now announce the names of those who are to serve on the committee of inquiry into Scottish-United Kingdom affairs.

Miss Herbison: My right hon. Friend hopes to be in a position to make an announcement shortly.

Colonel Gomme-Duncan: I must again ask the hon. Lady what "shortly" means. The matter has been on the tapis for some time.

Mr. Stewart: Are we entitled to presume that the committee will be formed before the Summer Recess?

Miss Herbison: I should hope so. Indeed, I am almost certain that it will be formed before the Summer Recess.

Major Guy Lloyd: May we have an assurance that the committee will not consist of those who are notoriously biased on this subject?

Miss Herbison: I can give the hon. and gallant Gentleman that assurance.

Building Materials

Mr. Ross: asked the Secretary of State for Scotland if he is aware that local authorities are experiencing difficulty in obtaining timber and other essential building material; that in Ayrshire the housing programme is endangered; and if he will take action to ensure that house construction is not impeded by lack of essential materials.

Mr. Manuel: asked the Secretary of State for Scotland in view of the number of representations being made to his Department by local authorities and building contractors as to the holding up of local authority house building through sufficient supplies of cement and timber not being available, what steps he is taking to deal with these complaints.

Mr. T. Fraser: Some temporary difficulty has arisen in fully meeting the demand for timber and cement. As regards timber, there is close and regular consultation between my officials and regional officers of the Board of Trade and Ministry of Works to ensure the utmost care in the use of stocks and to see that no hold-up occurs on housing or other essential works. Any case in which a hold-up is threatened is examined at once and, if necessary, supplies are released from a stock held in reserve to meet emergencies. As regards cement, I would refer the hon. Members to the answer given yesterday by my right hon. Friend the Minister of Works.

Mr. Ross: Will the Joint Under-Secretary consult the local authorities? He will find out that the difficulty which he describes as
temporary has been recurring season after season. Will he not take action to get rid of it once and for all?

Mr. Fraser: In point of fact, if we want to get this thing quite accurate, the difficulty only arose a few weeks ago, and the difficulty will disappear within the next month. I do assure hon. Gentlemen that there were no such difficulties about either timber or cement from the summer of last year until a few weeks ago.

Mr. Manuel: May I ask my hon. Friend to go into the question of the distribution of cement? I am informed by


a builder from the burgh of Irvine, who is on municipal houses that he can get plenty of this cement if he transports it from Dundee, which puts up the cost of the cement and adds to building costs in the area.

Mr. Fraser: I have personally been going into the distribution of timber and cement very recently. Of course, there are contractors and local authorities who run to merchants at a very great distance from the area in which they are working, and of course they get supplies from long distances. It very often happens that they could have got supplies much nearer at hand.

Commander Galbraith: Is the hon. Gentleman aware of the seriousness of this hold-up at this time in the building industry? What steps is he taking to see that it does not occur again?

Mr. Fraser: I have just been explaining to the House the steps that I have been taking to get over the difficulty, a difficulty which indeed arose because of the excellent building weather and the increased building work that has gone on in recent weeks.

Commander Galbraith: Is not the hon. Gentleman's Department capable of dealing with a situation that should have been perfectly obvious?

Mr. McGovern: Is it not the case that steps were not taken early enough and that the Government have largely slept in, in connection with this problem?

Mr. Fraser: I do not think we have had any hold-up as yet. Let me make that quite clear. I met the Scottish contractors only last week in Glasgow and I asked them to let me have knowledge of any case in the whole of broad Scotland where there was a stoppage. There has not been one, and I do not think there will be one.

Hospital Treatment (Old People)

Mr. Manuel: asked the Secretary of State for Scotland what arrangements are being made by the various regional hospital boards to provide hospitalisation for old people, many of whom are at present urgently needing trained nursing care, and are being deprived of it through the lack of sufficient nursing staff and beds.

Miss Herbison: Further expansion of facilities for this purpose will depend on the financial and other resources that can be made available to the hospital service. Arrangements are, however, in hand to make the best use of the existing facilities by adopting more intensive methods of treatment and to stimulate the fullest cooperation with the other residential and domiciliary services available to old people.

Mr. Manuel: Will the Joint Under-Secretary ask her right hon. Friend to go into the question, above all, of the utilisation of the hospital space available? I believe this should be looked at with a view to caring for our own old people and getting them hospital treatment almost immediately when necessary.

Miss Herbison: I can assure my hon. Friend that much attention has been given by the Department and the Ministers concerned to this matter. In some instances we have been able to find more accommodation by switching over the use of a hospital such as an infectious diseases hospital.

Mr. Henry Strauss: What happens to a "hospitalised" man when he is cured? Is he "de-hospitalised" or "homeised?"

Old people (Residential Accommodation)

Mr. Carmichael: asked the Secretary of State for Scotland if he will now submit a comprehensive report on the progress being made by the local authorities in Scotland to provide residential accommodation for persons who, by reason of age, infirmity or any other circumstances are in need of care and attention; and if he will give an assurance that all local authorities are taking measures to meet their obligations to old people as directed under the National Assistance Act, 1948, Part III.

Miss Herbison: An account of the progress made in providing residential accommodation under the National Assistance Act is contained in the Annual Report for 1949 of the Department of Health for Scotland. Since the passing of the Act, local authorities have opened six homes, 21 others have been acquired and are at various stages of preparation, while the acquisition of 16 others is being considered. My officers are in constant


touch with the local authorities on this matter and I think that the authorities generally are alive to their obligations.

New Towns

Colonel Gomme-Duncan: asked the Secretary of State for Scotland on how many new towns in Scotland work has been started; what is the estimated number of dwellings required in each; the number completed and occupied up to 31st May, 1950; and the number under construction at 31st May, 1950.

Miss Herbison: Work on both new towns in Scotland has been begun. Twelve thousand houses are estimated to be required at East Kilbride; at 31st May, 78 had been completed and occupied and 212 were under construction. Eight thousand houses were originally estimated to be required at Glenrothes, but this figure is being reviewed in the light of the latest information about coalmining development in Fife. No houses have yet been begun by the development corporation, but 136 houses are expected to be started shortly. The county council have two housing schemes within the new town area in which 18 houses have been completed and occupied and 278 are under construction.

Mr. Henderson Stewart: Does that answer mean that the number of dwellings to be built at Glenrothes in the county of Fife is now to be reduced?

Miss Herbison: At the present time we are dealing with new figures that have been put forward by the National Coal Board in the developing of that area. We must await the decision on these new figures before we can say what will be happening.

Mr. John MacLeod: Three or four years ago there was talk of a new town at Invergordon in my constituency. Has that idea been completely dropped now?

Miss Herbison: That is another question.

Major Lloyd: Will the hon. Lady tell the House what the latest estimate of total cost of new towns in Scotland is likely to be, because the people of Scotland want to know?

Miss Herbison: If the hon. and gallant Gentleman will put down a Question, we will try to answer it.

Commander Galbraith: Will the hon. Lady make certain that these towns are being provided with schools, churches and halls and that they are not being left without them, as other new towns have been?

Miss Herbison: It is one of the ideas behind the new towns that we should have the amenities that we did not have in the older places.

Shetland Wool Scheme

Mr. Grimond: asked the Secretary of State for Scotland when he hopes to be able to make a statement on the findings of the inquiry into the Shetland wool scheme.

Mr. T. Fraser: The Commissioner's Report on the public inquiry into the objections to the draft Shetland Wool Marketing Scheme was made 10 days ago and is being considered. This consideration may yet take some time.

Mr. Grimond: Bearing in mind the difficult situation which faces the crofters at the present time, will the hon. Gentleman give an assurance that no final decision will be taken on the matter until full publicity has been given to the findings of the inquiry and an opportunity given to the crofters to represent their point of view upon it?

Mr. Fraser: It is the duty of the Government to consider the Commissioner's Report and then to have consultations, if need be, with the promoters of the scheme. I think that we had better consider the Report and have discussions with the promoters before we indulge in any publicity campaign.

Oral Answers to Questions — MALAYA (MINISTERS' VISIT)

Mr. Black: asked the Prime Minister to state the total expense incurred by, or incidental to, the recent visit to Malaya of Ministers of the Crown and any staff accompanying them.

The Prime Minister (Mr. Attlee): The cost incurred was approximately £2,800.

Mr. Hogg: Does that include the expenditure of any small arms ammunition by the Secretary of State for War?

Mr. Mikardo: Can my right hon. Friend tell us the exact date on which the Opposition became converted to the view that there is something wrong about Ministers visiting territories for which they have responsibility?

Mr. Speaker: The Question only asked what the total expense was and not whether it was wrong or right.

Lieut.-Commander Gurney Braithwaite: Is not this a very small sum to enable Socialist Ministers to come to grips with reality, even for a short time?

Mr. Speaker: That also has nothing to do with the Question. I think we had better get on with the next Question.

Oral Answers to Questions — EQUAL PAY (GOVERNMENT POLICY)

Mr. George Thomas: asked the Prime Minister whether the speech of the Minister of Labour at the International Labour Conference in Geneva reflects the policy of the Government in regard to equal pay.

The Prime Minister: Yes, Sir. My right hon. Friend drew the attention of the Conference to considerations which should be taken into account if practical conclusions are to be reached on the methods of application of the principle of equal pay. In so doing he said nothing inconsistent with the Governments policy with regard to the acceptance of this principle.

Mr. Thomas: Does that reply indicate that the Government still acknowledge that equal pay is right in principle and that they will apply it as soon as the opportunity arises?

The Prime Minister: The reply means exactly what I have said.

Oral Answers to Questions — NATIONAL FINANCE

Government Departments (Stationery)

Brigadier Rayner: asked the Chancellor of the Exchequer if he will provide figures showing the amount of paper

and stationery consumed by each of the principal Government Departments during 1949 or the last year for which figures are available.

The Chancellor of the Exchequer (Sir Stafford Cripps): With permission, I will circulate the information in the OFFICIAL REPORT.

Brigadier Rayner: Will the right hon. and learned Gentleman say whether the increase in tonnage in 1948–49 was even greater than that in 1947–48?

Sir S. Cripps: The hon. and gallant Gentleman had better see the figures.

Following is the information:


CONSUMPTION OF PAPER AND STATIONERY BY PRINCIPAL GOVERNMENT DEPARTMENTS DURING THE CALENDAR YEAR 1949



Tons


Admiralty
2,920


Ministry of Agriculture and Fisheries
800


Air Ministry
2,850


Customs and Excise
350


Ministry of Food (excluding Rationing)
1,260


Ministry of Food (Rationing)
2,070


Foreign Office (including Diplomatic and Consular Services)
1,050


Foreign Office, German Section
630


Ministry of Fuel and Power
650


Ministry of Health
260


Inland Revenue
2,520


Ministry of Labour
690


National Assistance Board
380


Ministry of National Insurance
2,990


Post Office (excluding Telephone Directories)
3,720


Post Office (Telephone Directories)
8,460


Ministry of Supply
2,030


Board of Trade
590


Ministry of Transport
400


War Office
4,560


Ministry of Works
640

In addition the House of Commons consumed 770 tons during the year.

Official Motor Cars (Ministers)

Sir Herbert Williams: asked the Chancellor of the Exchequer how many miles, during each of the last three months, were charged to Cabinet Ministers in respect of their private use of official cars.

Sir S. Cripps: Mileage figures in respect of the private use of official cars by Cabinet Ministers and Ministers of Cabinet rank are furnished on a complete quarterly basis only. The latest reports cover the months January, February and March, 1950, for which period 3,136 miles were charged.

Sir H. Williams: Having regard to the small amount of amusement which these right hon. Gentlemen appear to have, will he inquire into some of the journeys to see if they included the English Cup Final?

Sir W. Smithers: How much is charged per mile?

Sir S. Cripps: That question has been answered several times and there is another Question on the Order Paper today.

Mr. Poole: Does my right hon. and learned Friend agree that this crawling in the guttter to try to find some muck to throw is deplored by all decent people, and that it was a very good thing that the Members of the war-time House of Commons had a higher conception of their public duty in regard to the travelling of Ministers in those days?

Earl Winterton: On a point of order, Mr. Speaker. May I ask whether the phrase "crawling in the gutter" as applied to a Question asked by a Member of the Opposition is in order, because, if so, some of us would like to use it about Members of the Government?

Mr. Speaker: I dislike ruling things out of order, but it is a statement which, anyhow, I do not like very much. I think I had better leave it at that.

Sir H. Williams: asked the Chancellor of the Exchequer to state the total mileage of the pooled cars when used by Ministers during each of the last three months.

Sir S. Cripps: The total mileage of the pooled cars when used by Cabinet Ministers and Ministers of Cabinet rank for the last three months for which records are available is:—February, 36; March, 60; and April, 476. Use by other Ministers is not separately recorded.

Captain Waterhouse: Might not this practice, which was useful in time of war, be discarded now that motor cars can freely be hired through private channels?

Sir S. Cripps: In my opinion, no, Sir.

Hereditaments, Hertford (Assessments)

Mr. Derek Walker-Smith: asked the Chancellor of the Exchequer in how many cases proposals have been served by the valuation officers of the Inland

Revenue in respect of cases decided by the Hertford Assessment Committee in the year 1949–50, where no changes in the hereditament are alleged between the date of the decision by the assessment committee and the proposal by the valuation officer.

Sir S. Cripps: Six hundred and forty-six, Sir.

Mr. Walker-Smith: Does not the Chancellor think that this procedure involves great hardship on the individuals and is also a considerable slight upon the local committees who were previously charged with these duties? Will he instruct his officers not to proceed in this way?

Sir S. Cripps: No, certainly not, Sir. This was litigation which we had inherited from the local committee, and it was not completed when my officers took over.

Mr. Walker-Smith: Does the Chancellor appreciate that my Question says:
… where no changes in the hereditament are alleged between the date of the decision by the assessment committee and the proposal by the valuation officer "?

Sir S. Cripps: Quite, Sir. The allegation made was that a proper inspection had not been made of the
premises by the earlier valuation officers. Since then an inspection has been carried out and, therefore an appeal made.

Japanese Bonds

Mr. Keeling: asked the Chancellor of the Exchequer what action he is taking to secure the rights of British holders of Japanese bonds.

Sir S. Cripps: I have no reason to think that the Japanese Government is not anxious to meet its obligations in this respect. The rights of the bondholders will of course be borne in mind in any discussions leading up to a peace treaty with Japan.

Trustee Act, 1925

Mr. Black: asked the Chancellor of the Exchequer what amendments of the Trustee Act of 1925 he is contemplating; and whether he will consider the inclusion of deposits with building societies as a form of trustee investment permitted by law.

Sir S. Cripps: None, Sir.

Entertainments Duty

Mr. Keeling: asked the Chancellor of the Exchequer what is the estimated annual amount of Entertainments Duty collected in respect of amateur entertainments not eligible for relief from Duty.

Sir S. Cripps: I would refer the hon. Member to the reply which I gave him on 13th June.

Mr. Keeling: Is the right hon. and learned Gentleman aware that that only referred to cases where relief is given? My Question today refers to cases where relief is not given.

Sir S. Cripps: Relief is given, as was stated on that occasion, in all cases where entertainments are amateur as defined in the Act of 1949.

Foreign Travel (Currency Allowances)

Sir W. Smithers: asked the Chancellor of the Exchequer to state on an annual basis for each year since May, 1945, the amount of British currency authorised to be taken abroad by travellers and tourists, giving separate figures for hard and soft currency countries.

Sir S. Cripps: As the answer contains a number of figures I will, with permission, circulate it in the OFFICIAL REPORT.

Sir W. Smithers: When is the Chancellor of the Exchequer going to free currency, especially for those business men who are going abroad to get orders for the export trade while there is still something left in the "kitty"?

Sir S. Cripps: All such persons are freely provided with currency now.

Following is the answer:

Total amounts of currency approved for tourism and other forms of travel:




Dollar Area £ million
Non-Dollar Area £ million


1945–46
…
2
2


1946–47
…
8
23


1947–48
…
9
32


1948–49
…
6
24


1949–50
…
5
40

Within the non-dollar area the division between hard and soft currency countries has not been constant over the period

and only totals for the whole area, therefore, are given.

Mr. Donner: asked the Chancellor of the Exchequer if he is now in a position to make a statement on the foreign currency allowances available to motorists in order to place them in approximately the same position as those who, preferring to travel by rail, can pay for the whole cost of their tickets for sterling in London.

Sir S. Cripps: I have decided that the allowance for motorists should be raised from £10 to £15 with effect from tomorrow.

Mr. Donner: Is the Chancellor aware that, while that concession is welcome, it does not eliminate the existing anomalies?

Sir S. Cripps: It is the best we can do.

Mr. Keeling: Can the Chancellor explain why anybody who travels by car abroad can only use £15 of foreign currency while anybody who travels by rail abroad can spend up to hundreds of pounds of foreign currency?

Sir S. Cripps: This is averaging out the probable user so as to get the two things in relation to one another.

Mr. Drayson: Does it mean that tourists who have already spent £10 of their motor car allowance can draw a further £5 if they go abroad again?

Sir S. Cripps: I had not thought of that one.

Mr. Erroll: Will this concession be extended to foreign-going yachts?

Sir S. Cripps: Perhaps the hon. Gentleman will put that question on the Order Paper.

Sir W. Smithers: Does the House realise, when the Chancellor says, "I have decided," to what extent he has become dictator of this country?

Sir H. Williams: Can the Chancellor say why it was that the answer which he has just given was in a lot of newspapers before he gave it here?

Sir S. Cripps: I really could not say.

Sir H. Williams: Then will the right hon. and learned Gentleman find out?

Estate Duty (Agricultural Land)

Mr. Hurd: asked the Chancellor of the Exchequer if, by analogy with the recent concession in the case of householders, he will consider the case of the valuation for Estate Duty of agricultural land in possession where the succession is a bona fide transference of a farming interest and instruct district valuers that in such cases they should value on the basis of an agreed period of purchase of the reasonable investment value.

Sir S. Cripps: No, Sir.

Mr. Hurd: Is there any good reason for drawing a distinction between one class of property and another?

Sir S. Cripps: Well, Sir, that is what has been done. Agriculture has a preference of nearly 50 per cent. at the present time.

Post-War Credits

Miss Irene Ward: asked the Chancellor of the Exchequer what is the total amount of post-war credits due to Service personnel which was cancelled on discharge to pay arrears of Income Tax due.

Sir S. Cripps: I regret that this information is not available.

Miss Ward: Am I to understand from that answer that some post-war credits

have been cancelled in respect of arrears of Income Tax?

Sir S. Cripps: No, Sir. The hon. Lady can understand that the information is not available.

Lieut.-Commander Braithwaite: Was it not the case that certain post-war credits were set off against claims in the financial year 1945–46, and might not that prove to be a valuable precedent for subsequent years in which tax has been demanded from ex-Service personnel?

Sir S. Cripps: That is another question.

Turpentine (Duty)

Mr. Erroll: asked the Chancellor of the Exchequer what was the annual yield from the tax on turpentine used for medicinal purposes; and what is the estimated yield at the new rate.

Sir S. Cripps: The receipts of Hydrocarbon Oil Duty paid on turpentine used for medicinal purposes are not separately recorded, but I understand that the yield from the duty on turpentine used for this purpose at 1s. 6d. a gallon will be between £3,000 and £4,000 a year.

Mr. Erroll: As the amount is so small, would the Chancellor consider removing the duty altogether from this class of oil?

Sir S. Cripps: That seems to me to be a matter for discussion on the Finance Bill.

Orders of the Day — WAYS AND MEANS

REPORT [19TH JUNE]

Resolution reported:

PURCHASE TAX (ROAD VEHICLE CHASSIS AND ROAD VEHICLES).

That any Act of the present Session relating to Finance may amend the purchase tax law as from the first day of July, nineteen hundred and fifty, so as (subject to any power of the Treasury to make orders) to include road vehicle chassis among the classes of goods which are chargeable goods, and among the classes which are relevant to the provisions about chargeable processes, and may in that connection make provision—


(a) for modifying, in the case of road vehicle chassis, the provisions as to the value on which, and the circumstances in which, purchase tax becomes chargeable;
(b) for treating part of a chassis-less vehicle as chassis;
(c) for other incidental matters;
and the Act may also include provision about cases in which contracts may have been affected by a prospective liability thereunder to purchase tax in respect of road vehicles.

Resolution read a Second time.

Question, "That this House doth agree with the Committee in the said Resolution," put forthwith, pursuant to Standing Order No. 86 (Ways and Means Motions and Resolutions), and agreed to.

Instruction to the Committee on the Finance Bill that they have power to make provision therein pursuant to the said Resolution.

FINANCE BILL

Considered in Committee [Progress, 19th June].

[Major MILNER in the Chair]

3.30 p.m.

Mr. Eden: Before we proceed to business, with the leave of the House may I ask the Chancellor a question? I believe that good progress was made yesterday. There are a number of new Clauses, some of them important ones, and some of them in the name of the Government. It looks as if it will be rather difficult to discuss those adequately in the two days. I do not know what the Chancellor feels, but I do not think anybody wants a late sitting if it can be avoided. I was wondering whether the Government could consider, if there is good and reasonable debate, whether a third day would not be preferable to sitting late either tonight or tomorrow night?

The Chancellor of the Exchequer (Sir Stafford Cripps): I think that with the same good co-operation as we have had in the course of these discussions, and in view of the number of Clauses that are being selected for debate, it should be possible to get through them, but perhaps we could see later on this evening how we proceed.

Sir Waldron Smithers: On a point of order. I understand that a new Clause (Easter Offerings) has not been selected. I do not criticise that for one moment, but I want the clergymen of England to know that we have done our best for them.

Sir Herbert Williams: On a point of order. I gather that the Chancellor of the Exchequer has already been informed what Clauses are to be selected for Debate, and the hon. Member for Orpington (Sir W. Smithers) also seems to be informed. It would be a great convenience if the rest of us could be told.

The Chairman: Any hon. Gentleman is at liberty to see the Secretary to the Chairman of Ways and Means and inquire as to any particular Amendment. That always has been so.

New Clause.—(DUTY FREE IMPORTATIONS FOR INDUSTRIAL RESEARCH.)

(1) Where the Board of Trade are satisfied that any goods imported or proposed to be


imported after the coming into force of this section are intended and are reasonably required for the purpose of subjecting the goods, or any material or component in the goods, to examination or tests with a view to promoting or improving the manufacture in the United Kingdom of articles similar to those goods or to that material or component, as the case may be, the Board may if in view of all the circumstances of the case they deem it expedient so to do recommend the Treasury to direct that the next following subsection shall apply to the goods, and if on that recommendation the Treasury so direct the said subsection shall apply accordingly:

Provided that in giving any such direction the Treasury may themselves impose conditions for restricting the use or disposal of the goods and may authorise the Commissioners to impose conditions for the protection of the revenue and, where conditions are imposed by or under the direction given with respect to any goods, the said subsection shall apply to any of the goods only if and so long as those conditions are complied with and (where the Commissioners so require) security is given that they will be complied with.

(2) So long as this subsection applies to any goods, payment shall not be required of any of the following duties customs which may be chargeable in respect of the importation of the goods, that is to say—

(a) the duties chargeable under Part I of the Import Duties Act, 1932;
(b) the duties chargeable on silk or artificial silk or articles made wholly or in part of silk or artificial silk;
(c) the duties chargeable under the Safeguarding of Industries Act, 1921.

Provided that where it is proposed to use or dispose of the goods in any manner for which the consent of the Treasury is required by the direction given with respect to the goods, the Treasury may consent to the goods being so used or disposed of subject to payment of the duty which would have been payable but for the direction or such part of that duty as the Treasury think appropriate in the circumstances.

(3) Subject to such conditions as the Commissioners may impose for the protection of the revenue, any of the said duties paid on the importation of any goods shall be repaid, if the Commissioners are satisfied that by virtue of a direction subsequently given under this section subsection (2) thereof applies to the goods.

(4) Where by virtue of a direction given under this section goods are imported without payment of duty or duty paid on their importation is repaid, and any conditions imposed by or under the direction are not complied with, then (without prejudice to any liability for duty) the goods shall be forfeited.

(5) The Board of Trade shall not make a recommendation under this section about any goods except on a written application made by the importer before delivery of the goods to him.—[Mr. Bottomley.]

Brought up, and read the First time.

The Secretary for Overseas Trade (Mr. Bottomley): I beg to move, "That the Clause be read a Second time."

This Clause is designed to permit British manufacturers to import duty-free goods made in a foreign land for the purpose of studying new ideas which are incorporated in such products. We are told that research is somewhat discouraged by the imposition of a tariff, and this Clause seeks to relieve from Customs Duty specimen articles. The object is to see if, by the use of component parts or principles of design, articles manufactured in this country can be improved. It is also to see if an imported article can be then manufactured in this country. It is not intended to cover articles imported with a view to further importation, nor is it intended to cover goods used as a means, rather than an object, of research.

Hon. Members will see that the Clause is rather widely drawn; however, I am sure the Committee will agree that its administration ought to be strict, in order to ensure that, when we bring in goods where there is a new principle involved, it will enable us to improve production. Also we want to be sure there will be no loss of protection to the United Kingdom industry.

Mr. Oliver Lyttelton: We on this side of the Committee are grateful that the Government have adopted the policy which we advocated in the Finance Bill of last year and certainly, in accepting our point of view, they have taken an enlightened outlook on the subject. It is hardly necessary for me to develop the arguments which have apparently convinced the Government, as they convinced us in the past, and I can only say that we welcome the Clause.

Sir Wavell Wakefield: Subsection (5) says:
The Board of Trade shall not make a recommendation under this section about any goods except on a written application made by the importer before delivery of the goods to him.
Exactly why is that time specified? Why could it not be any time within, say, six months? It will be recalled that on Clause 10 I asked a similar question as to why an extension of time should not be allowed in case of difficulty, and no answer was given to me. There is no new principle involved; it is merely a question


of time to make it a bit easier for anybody wishing to take advantage not only of this Clause but also of the same advantage under Clause 10.

Mr. Bottomley: This is to some extent linked with what the right hon. Member for Aldershot (Mr. Lyttelton) had to say. The amendment put down last year was so wide that we would have found all kinds of goods coming in free of that tariff duty and this would have hindered our own industry. Because of that we take this rather more closely controlled means of ensuring that we safeguard the position. Also we want to be assured that we can identify the goods that are to be free from this Customs Duty, and if we followed the suggestion of the hon. Member I am told that would not be possible.

Mr. Erroll: We on this side of the Committee welcome the appearance of this Clause since we pressed for one along these lines during the Committee stage of the Finance Bill last year. It is particularly appreciated by the non-Parliamentary members of the Parliamentary and Scientific Committee who feel that it will be of considerable assistance to them and to their research association.
Will there be any real difficulty in agreeing the nature of the goods and whether they qualify for exemption? The procedure certainly looks cumbersome according to subsection (1), which says that the Board of Trade may, in view of the circumstances, deem it expedient only to recommend the Treasury to direct that a subsection shall apply and if, on that recommendation, the Treasury so direct, the said subsection shall apply. I suggest that this subsection has in it all the seeds of delay, and I should like an assurance that reasonably prompt decisions will be given, yes or no.
Then there is the question of the ultimate disposal of the goods after they have been subjected to tests and research in this country. According to the second paragraph of subsection (1) the Commissioners may require security to be given by the recipients. This may perhaps involve the recipients in a bond of some kind, and it is important to know that the Commissioners will be reasonably intelligent with regard to the ultimate disposal of the goods once they have had the investigations on them completed.
They may have only a scrap value, or a very small value. I hope that there will be no niggling by the Commissioners to try to regain some fractional part of the duty on the residual value, if any, of the goods.
There is a further point which I cannot follow. Subsection (4) deals with goods being forfeited. We know that this is an old custom and a jealously held right of the Customs and Excise to be able to forfeit goods if duty has not been paid on them or if there has been any form of evasion whatsoever. I imagine that the subsection was written in more or less as a matter of form. Is it really appropriate in this case? Will it really be practicable to forfeit the goods which have been improperly used once they have been used?
Let me give two practical examples. First, the case of, say, some experimental ball bearings which are brought to this country and incorporated in a test engine. Will it really be practicable for the Customs officers to enter the premises and dismantle the engine in order to take away the experimental ball bearings because the duty has not been paid on them? Many of the substances of the goods will become inextricably mixed up with other articles and substances in the course of tests. Paint may be imported duty free and spread over a number of surfaces. How is the paint to be forfeited if duty has not been properly paid on it? I suggest that this subsection will lead to so much ridicule that it would be far better not to incorporate it at all.

Sir S. Cripps: If the hon. Member does not like it he should vote against it.

Mr. Erroll: I do suggest that that is a rather absurd answer of the Chancellor of the Exchequer. I welcome the Clause as a whole and was only drawing attention to a small absurdity in subsection (4). However, in view of what the Chancellor has said to me, I shall be very glad to-table an Amendment, which I hope will be accepted, on Report stage calling for the deletion of the subsection, and I sincerely hope that the Chancellor will accept it. In the meantime, I reiterate that I welcome the Clause for what it does.

Mr. Pickthorn: Is it possible to tell us shortly what will be the normal procedure and criterion for satisfying the


need of the Board of Trade? Will it rest in the main on testimony which will be weighed in the Anglo-Saxon method—the larger the firm is, the fewer compurgators does it have to produce; or how is it intended to be done? Is it intended that there shall be cross-examination of the applicants by the Board of Trade, and can we be told about the words "reasonably required"? Very often, perhaps, normally when the word "reasonable" or "reasonably" is put in these drafts, it lays the consequent action open to judicial decision; but I take it that it does not do that here. I take it that it does not mean that somebody has a right to go to a court and say that the thing was "reasonably required" and that the Board of Trade was "unreasonable" in accepting that view. I imagine that that is not the intention or effect of these words, and I should like to be assured or corrected on this point.

Mr. Bottomley: There really is no difference between the two sides of the Committee on this matter. What we are endeavouring to do is to make sure that we get a high standard of production of a given article which at present either is or is not manufactured in this country. I can assure the hon. Member for Carlton (Mr. Pickthorn) that in the Board of Trade our past experience with industry has been one of complete understanding, working towards securing what is best for the interests of the country. That spirit has been commended very often by hon. Members who sit with me upon the Consultative Committee for Industry, and we shall see that jointly we achieve that purpose in order to secure what is obviously the desired object of both sides of the Committee.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

New Clause.—(AMENDMENT OF POWERS TO ALLOW DRAWBACK.)

(1) A scheme under section nine of the Finance Act, 1932, for allowing, in the case of goods of any class or description, a drawback of import duties in respect of any material used in the manufacture of those goods may make provision as follows, that is to say:

(a) instead of providing in accordance with paragraph (b) of subsection (2) of the said section nine for the allowance of drawback in respect either of the quantity of the

relevant material actually contained in the goods or of such average quantity of material as is mentioned in that paragraph, the scheme may provide for the allowance of drawback in respect of the quantity of the relevant material actually contained in the goods together with such additional quantity as may be specified in the scheme as being the appropriate allowance for wastage in the manufacture of the goods;
(b) the scheme may specify a rate of drawback exceeding the limit imposed by paragraph (c) of the said subsection (2), if the rate specified is such as would not exceed that limit were the limit imposed by reference to the average amount of duty paid in respect, not of all duty-paid material of the relevant class or description, but of such of that material as is used, either by manufacturers generally or by any particular manufacturer, in the manufacture either of all goods of the relevant class or description or of such goods of that class or description as are manufactured for export;
(c) instead of specifying a rate of drawback for the relevant material in accordance with the said paragraph (c), the scheme may divide the material into two or more categories (by reference to the duty paid or otherwise) and specify a rate for each category as if it were a separate class or description of material for purposes of the scheme.
(2) Any additional quantity specified under paragraph (a) of the foregoing subsection as being the appropriate allowance for wastage shall be fixed as so much per cent. (by the same measure of quantity as is used in fixing the rate of drawback) of the quantity of the relevant material actually contained in the goods, and for the purposes of that paragraph the expression "the appropriate allowance" means the allowance equivalent to the average rate of wastage of the relevant material, either by manufacturers generally or by any particular manufacturer, in the manufacture either of all goods of the relevant class or description or of such goods of that class or description as are manufactured for export.
(3) Where any such scheme as is mentioned in subsection (1) of this section provides different rates of drawback for different categories of the relevant material in accordance with paragraph (c) of that subsection, and in the manufacture of any goods in the case of which drawback is payable under the scheme, there has been used material of more than one of those categories, then (unless the scheme allows drawback only in respect of the quantity of material actually contained in the goods) the quantity of material in respect of which drawback is payable at each of the rates applicable in the case of those goods shall be arrived at as follows:—

(a) if the scheme allows drawback in respect of the quantity of the relevant material actually contained in the goods together with such additional quantity as is mentioned in paragraph (a) of subsection (1) of this section, the said additional quantity shall be deemed to be material of the same categories, and in the same proportions, as the relevant material actually contained in the goods (excluding any such material which is not duty paid);


(b) if the scheme allows drawback in respect of the average quantity of the relevant material used in manufacture as provided for by paragraph (b) of subsection (2) of the said section nine of the Finance Act, 1932, the quantity in respect of which drawback may be allowed at the rate applicable to any category shall be the quantity of duty-paid material of that category which is shown to the satisfaction of the Commissioners to have been used in the manufacture of the goods, but so that this paragraph shall not affect the total quantity of material in respect of which the drawback may be allowed and, where it would otherwise have that effect, the quantity in respect of which drawback would be payable at a lower rate shall be increased or reduced as the case may require, in preference to the quantity in respect of which it would be payable at a higher rate.
(4) In subsection (1) of this section the expression "import duties" means any of the following duties of customs, namely—

(a) the duties chargeable under Part 1 of the Import Duties Act, 1932;
(b) the duties chargeable under section one of the Ottawa Agreements Act, 1932;
(c) the new duties chargeable under section nine of the Finance Act, 1933, on silk or artificial silk or articles made wholly or in part of silk or artificial silk;
(d) the duties chargeable under the Safeguarding of Industries Act, 1921;
(e) the duties chargeable under the Beef and Veal (Customs Duties) Act, 1937;
and any reference in this section to section nine of the Finance Act, 1932, shall accordingly include that section as applied by subsequent enactments to the duties mentioned in paragraphs (b) to (e) of this subsection.—[Mr. H. Wilson.]

Brought up, and read the First time.

3.45 p.m.

The President of the Board of Trade (Mr. Harold Wilson): I beg to move, "That the Clause be read a Second time."

The Clause is designed to amend Section 9 of the Finance Act, 1932, which provides for the payment of a drawback in respect of duty which is paid on materials used in the manufacture of goods which are subsequently exported. I think the Committee would agree that that Section of the 1932 Act has on the whole worked pretty well. It has succeeded in holding a fair balance between the interests of exporters and of producers for the home market. The development of the export drive in the past year or so, however, has shown the need for further measures, and that is why the Clause is now moved.

The existing provision is open, I think, to criticism on two grounds. It has two main weaknesses. First, under the existing legislation no provision is made for wastage of materials in manufacture in those cases where the drawback is calculated on the basis of the content of the materials in the goods which are subsequently exported. There is provision for wastage if the calculation is based on the average usage of this material in manufacture in the industry as a whole. Under subsection (1, a), wastage is now allowable, even if the drawback calculation is based on the content of the material in the finally exported commodity.

The second point with which the Clause is designed to deal is this. In the past, a drawback has been calculated on the basis of the average of duty of all imports of the materials in question. Under the new Clause, the Board of Customs and Excise can calculate the drawback on a sliding scale depending on the price of the imported material which is actually used. Secondly, as is clear from subsection (1, b) after a little study, the Board may calculate the drawback on the average value of the imported material which is used for export instead of calculating it on the value of all the imports of the material in question.

The matter might be made a little clearer if I were to take a specific case which was very much in our minds when the Clause was tabled: the case of leather. Leather-using industries are making a big contribution to our export drive, particularly to North America. To a considerable extent, of course, they use imported raw materials, and under the present provisions of Section 9 of the 1932 Act, drawback is paid on the basis of an average calculation of duty which is paid on all leather, which at present works out at about 7d. per square foot. The actual duty which is paid on different qualities of leather, however, varies from 5d. to about 1s. 5d. per square foot; and very often it is the better quality and higher priced leathers which go into the goods which are sent to the dollar market. Under the new Clause, therefore, it is possible for the drawback to be calculated on the average duty which is paid on the leather actually used rather than


on an average price calculated for all leather imported into the country.

I should explain that the Clause represents our first attempt to deal with the problem of drawback in relation to the dollar export problem. Had we intended to make it a final solution to the problem, I think that we would have had to hold it up for another year, but this present step makes the job of exporting to the dollar areas considerably easier, certainly for the leather-using industry and for certain other industries in a similar position. It arises as an immediate proposal on our part as a result of discussions with industry and with the Dollar Export Board, who strongly pressed it upon us. We are at present studying the possibilities of further changes which may well help other industries which cannot benefit from the new Clause.

Mr. Lyttelton: This Clause is to be welcomed, not so much for its form, as for the substance which apparently lies behind it. It really is a jaw breaker and it does not in my opinion—as the President of the Board of Trade confessed—yet go quite far enough, but I am sure it is a step on the right road and as such we ought to be grateful for it. I know it is a rather unfashionable thing to do, but I think it highly desirable that these Clauses should be expressed in language which the ordinary layman can understand. I am sure my hon. Friend the Member for Croydon, East (Sir H. Williams) will support that. The language is worth looking at because it really is a terrible jumble. I daresay it is unavoidable, but I make that plea to the Chancellor.

Question put, and agreed to.

Clause read a Second time and added to the Bill.

New Clause.—(EXCISE LICENCES FOR TRACTORS, ETC.)

(1) The Vehicles (Excise) Act, 1949, shall have effect as if subsection (2) of section four (which sets out the vehicles chargeable with duty at the rates provided for by that section) were amended as directed by the next following subsection of this section, and accordingly read as set out in the Schedule (Section 4 (2) of the Vehicles (Excise) Act, 1949, as amended) to this Act.
(2) The amendments to be made in the said subsection (2) are as follows—

(a) in sub-paragraph (ii) of paragraph (a) the words "in the occupation of the person

in whose name the vehicle is registered under this Act" shall be omitted;
(b) at the end of the said paragraph (a) there shall be added the following subparagraphs:—
(iii) for hauling, within fifteen miles of a farm in the occupation of the person in whose name the vehicle is registered under this Act, agricultural produce of that farm or fuel required for any purpose on that farm or for domestic purposes by persons employed on that farm by the occupier of the farm;
(iv) for hauling articles required for a farm by the person in whose name the vehicle is registered under this Act, being either the owner or occupier of the farm or a contractor engaged to do agricultural work on the farm by the owner or occupier of the farm;
(c) paragraph (e) (which specifies the tractors and other vehicles for which the section provides rates of duty from twelve pounds upwards according to their weight), shall be omitted;
(d) in paragraph (f), for the words "the foregoing paragraphs", there shall be substituted the words "paragraphs (a) to (d).
(3) The rate of duty chargeable under the Vehicles (Excise) Act, 1949, in respect of any such vehicle as is mentioned in paragraphs (a), (b), (c) or (d) of subsection (2) of section four of that Act shall be two pounds, and accordingly in the fourth column of the Third Schedule to that Act, for the words "5s. 0d.", wherever they occur, there shall be substituted the words "£2 0s. 0d.
(4) In subsection (2) of the said section four (and in this subsection)—

(a) any reference to a farm shall include a market garden;
(b) any reference to agricultural produce of a farm shall include osiers grown on that farm;
(c) any reference to articles required for a farm shall include articles which are or have been required for doing work on and for the purposes of the farm, except that in the said subsection (2) the reference to articles required for a farm by a contractor engaged to do agricultural work on the farm shall include only articles required for the farm in connection with that work;
(d) any reference to the owner of a farm includes any person having any estate or interest in land comprised in the farm.
(5) In section two of the Finance Act, 1935 (which disallows rebate on heavy oils used as road fuel for a vehicle as defined in that section), for the definition of "vehicle," in paragraph (d) of subsection (7), there shall be substituted the following definition:
(d) the expression 'vehicle' does not include any such vehicle as is mentioned in paragraph (a), (b), (c) or (d) of subsection (2) of section four of the Vehicles (Excise) Act, 1949, as amended by the Finance Act, 1950 (or as would be mentioned in the said


paragraph (a) as so amended if the references therein to the said Act of 1949 included references to the law as to the registration of mechanically propelled vehicles for the time being in force in Northern Ireland), or any vehicle being a road roller.
(6) The foregoing provisions of this section shall have effect only as from the beginning of the year nineteen hundred and fifty-one, but the Vehicles (Excise) Act, 1949, and section two of the Finance Act, 1935, shall have, and be deemed to have had, effect as if the periods respectively mentioned—

(a) in sub-paragraph (1) of paragraph 1 of the Sixth Schedule to the said Act of 1949 (which paragraph makes a temporary extension of the class of agricultural tractors etc. qualifying for a five shilling licence and for oil rebate in Great Britain); and
(b) in subsection (4) of section eight of the Finance Act, 1943 (which section has the same effect as respects oil rebate in Northern Ireland);
ended with the end of the year nineteen hundred and fifty instead of with the end of June in that year.—[Mr. Gaitskell.]

Brought up, and read the First time.

The Minister of State for Economic Affairs (Mr. Gaitskell): I beg to move, "That the Clause be read a Second time."

This new Clause is designed to modify the arrangements regarding excise licences for tractors. Before the war there were two rates of duty paid by farmers. In the first place, a tractor which was used only for farm work, for moving from one part of the farm to another part of the same farm, or for use on the roads only for hauling tractor machinery, paid the nominal duty of 5s. a year. On the other hand, if a farmer wished to use a tractor for carrying the produce of his farm, he had to pay a £12 tax or more according to the weight and, of course, quite apart from the duties paid by farmers, hauliers and contractors paid still higher rates.

During the war temporary arrangements were made because of the shortage of transport enabling farmers to pay the nominal rate of 5s. on tractors of both kinds and they were also granted a rebate on heavy oil used for road vehicles which had been introduced some time before the war for other vehicles. In 1949 the Vehicles (Excise) Act consolidated the pre-war arrangements and brought the temporary provisions I have mentioned to an end and simply reimposed what I have described as already applying before the war.

Discussions have taken place with the representatives of the farmers, the National Farmers Union, to see if we could find a more satisfactory arrangement than the pre-war arrangement. I think there is no doubt that in many respects it is not very suitable for modern conditions in which the amount of farm machinery and the number of tractors have enormously increased. On the other hand, obviously one cannot have a situation in which the farmers pay a very low rate and are completely free to compete with hauliers, who pay a very much heavier rate.

After discussions, agreement was finally reached on the provisions in the new Clause. In future there will be a single rate of £2 a year in place of the two earlier rates, and the £2 a year rate applies not merely in the conditions that applied to the old 5s. rate, but also to the conditions, broadly speaking, which applied to the old £12 rate. Even those have been widened so that in some cases agricultural contractors, for instance, can tax their vehicles at the new £2 rate, whereas before the war they would have had to pay the very much heavier rates. The qualification of what I have just said is that there is now a mileage limit of 15 miles applied to the new rate.

The only other part of the Clause I need mention is the extension of the oil rebate to the new vehicles taxed at the £2 rate. The Committee will probably agree that this is a more satisfactory and simple arrangement than the one we had before the war. It is acceptable to the farmers and, therefore, I commend it to the Committee.

Sir H. Williams: This afternoon's performance is rather like a variety performance, because we have had a different Minister for each new Clause. I am not saying that is a bad thing, although it is a bit like a "Crazy Gang" performance.

This new Clause, I am certain, is a valuable concession, but it is an interesting illustration of the mess we are getting into because we have all the laws much too tight. I ask hon. Members, for example, to read paragraph (iii). The concession goes to people if they haul within 15 miles of a farm. I am wondering now that is to be administered. We are going to have a whole lot of snoopers watching farmer "B" to see if he goes 15½ miles beyond his farm.

This is all the result, not of a bad Clause, but of having the whole thing so tied up, and the Government are in such a mess that they have to give someone a measure of relaxation. It is in such a form that in due course it is bound to lead to prosecution and all sorts of innocent people are to be charged because their lorry or tractor has gone more than 15 miles from their place of occupation.

Later, the proposed new Clause gives a definition of agricultural produce and I am certain it is a useful definition. It includes osiers, which, I believe, are used for basket making. I am not an expert on that, but I see that there is an Amendment down in the name of the hon. and gallant Member for Argyll (Major McCallum), which seeks to include all forestry products, and if it were carried there would be no need to insert the word "osier."

The Clause illustrates the awful mess we are in because we have tied up the whole community so tightly and Clauses like this have to be proposed in order to take off the shackles. I am not in the slightest opposed to the Clause and I am certain it will help a lot of people, but it exposes the deplorable condition in which we now find ourselves because the legislation is too tight.

Captain Crookshank: While I would not disagree with my hon. Friend the Member for Croydon, East (Sir H. Williams) on the general question of de-shackling the whole community, the fact remains that this new Clause is one which deals with the agricultural community rather than the urban community, and it has been agreed, I am informed, with all the different people directly concerned. To that extent, therefore, it is to be welcomed. Of course one must realise that it is in fact increasing the burden in one direction, although there may be relaxations in certain directions. Anyone may see from the perfectly simple drafting that subsection (3) says:
for the words '5s. 0d.,' wherever they occur, there shall be substituted the words '£2 0s. 0d.'
Anyone will realise that that is a burden being put on in one direction. However, I am informed that the general relaxation is welcome and, therefore, on the Second Reading of the Clause I offer no opposition. If Amendments are

called, that may be another matter. Although negotiations have gone on for a very long time, I am glad that they have come to a conclusion on which both sides of the table were able to agree.

Mr. Spence: May I ask a question about the 15-mile limit? The right hon. Gentleman has assured us that the main provisions
of the Clause have been agreed by all parties interested. It would seem on a first examination that 15 miles is too short a distance. Could we have an assurance that the Minister consulted interests in the outlying parts of the country?

4.0 p.m.

Mr. Gaitskell: In reply to the hon. Member for Croydon, East (Sir H. Williams), I feel sure that if only one Minister were to speak on these new Clauses or Amendments the Opposition would be the first to criticise and, seeing other Ministers on the Bench, would say that they should say something, some time. We thought that a little variety was probably more enlivening to the Committee than the same voice all the afternoon. As for the complexities which the hon. Member suggested were introduced in this matter, I must remind him that they were introduced when the tax was first applied to road vehicles. We are seeking here to simplify something which was not very satisfactory before the war. It is generally agreed that this proposal is an improvement.
In reply to the hon. Member for Aberdeenshire, West (Mr. Spence), I would say that we have consulted and discussed this matter with the National Farmers' Union, who are after all the most representative body in this field. They have certainly accepted the 15-mile limit as a limit which is at least very much wider than the limit of the farm, which previously applied. At the same time, the conditions under which tractors can be used have also been modified quite substantially. I think the hon. Member will agree that we must have some limit, otherwise the possible competition of those taking advantage of this new Clause with the hauliers would be quite unfair.

Lieut.-Colonel Sir Walter Smiles: My farming constituents generally will welcome this new Clause. I have certainly had many complaints


during the last two years about a change being needed in the taxation of tractors. I heard my hon. Friend the Member for Croydon, East (Sir H. Williams) suggest that there were too many shackles and this proposal was loosening shackles. I agree that the Committee is at present taking a definite step towards loosening these shackles. This proposal will be a great help, certainly to the farming community in my constituency. As for the limit of 15 miles, I dare say we should all have liked the figure to be 20 or 25 miles, but I think that 15 miles will be a very useful distance in my constituency and in the North of Ireland generally.

Mr. Gerald Williams: I am in some difficulty about this Clause because I do not know if the Amendment which follows is to be conceded. If not it will be peculiar if agricultural produce is defined only by the word "osier". There are a lot of other things such as pea sticks and bean boughs which a farmer may want to carry. Once one begins naming such products one might have a very long list. It is permissible for a farmer to carry firewood for his own purposes, but he may also collect cordwood from trees felled on his farm which he may want to sell. I am not sure that that will be permissible. If the Minister does not intend to accept the Amendment to which I have referred, could he do something to deal with the point I have mentioned?

Mr. Macdonald: My farmer constituents will welcome this new Clause, but they are almost certain to ask for some explanation about the 15-mile limit. I do not wish to sound pedantic about this provision, but I should like to ask whether the limit operates from the borders of the farm or whether what is envisaged is a 15-mile radius from the farm. Most tractors are not fitted with speedometers or mileage indicators so far as I am aware. It would be a much easier provision to observe if it meant a 15-mile radius rather than 15 miles over fields and along roads.

Mr. Gaitskell: The Solicitor-General informs me that it would be 15 miles from the borders of the farm in any direction.

Sir H. Williams: By road distance or as the crow flies?

Mr. Charles Williams: I welcome this concession to the farmers, and I appreciate it. It will meet the case in my constituency, but a point does arise about the remoter areas. To take the West Country, there is Devon, in which are great areas such as Dartmoor. There one could point to many cases where this limit would not operate satisfactorily. That consideration applies even more to the Highlands. I suggest as a solution that the Minister might look into the feasibility of giving an exemption where tractors are used at very long distances from the farm buildings.
I am the last person to advocate the use of more certificates or Governmental activities of that kind, but I fully realise that a limit must be imposed under the circumstances. I should like to ask whether for the very sparsely populated areas—and I think this plea ought to embrace Wales as well and possibly parts of Yorkshire—it might be possible to consider my suggestion that where there is a recommendation, say from the county agricultural committee, certain farmers might be allowed to operate over a wider radius, purely for agricultural and forestry purposes of course. For that reason I urge the Minister to reconsider this matter.

Mr. Grimond: I should like to support what has been said so well by the hon. Member for Torquay (Mr. C. Williams), and to draw attention to two cases. The first is that of a farmer or crofter who has a peat bank which may be a considerable distance from the farm building or the limits of the farmer's arable area. The other is that of a farmer having to lift most of his stores from a pier which may be a considerable distance away.

Mr. Douglas Marshall: I hope that the Minister will take due note of the point which has been raised about the sparsely populated districts. In particular I hope he will always bear in mind the effect of a 15-mile radius limit in cases of farms situated on a peninsula, and which have a seaboard on one side of the farm. In such cases the mileage which is allowed is less than in the case of farms in the centre of the mainland. This point should be borne in mind and special conditions should be laid down for those so situated. I trust that the Minister will pay attention to that matter.

Mr. Peter Roberts (Sheffield, Heeley): At present if one pays £12 the tractor can be used over any distance. Do I understand that with the £2 flat rate tractors can be used only within a radius of 15 miles and that one cannot apply for a £12 licence to enable it to be used over any distance?

Mr. Gaitskell: The £12 licence is abolished.

Mr. Roberts: Does that mean it is impossible for a farmer, if he wishes, to take things by his own tractor further than 15 miles? I know many who do rather than go to a road haulage concern or nationalised transport. If he is prevented from doing so that is a retrograde step.

Mr. Gaitskell: He falls into the same category as the general haulier and he is put in the same position as the general haulier.

Mr. McKie: As the representative of a constituency which is vitally interested in this matter, I should like to support what was said by the hon. Member for Orkney and Shetland (Mr. Grimond). I am sorry that I was unable to be present at the opening of the discussion, the reason being that a constituent wished to see me, and I left the Chamber. I hope that the right hon. Gentleman will appreciate that I meant no discourtesy. The hon. Member for Orkney and Shetland drew attention to what might happen in the case of peat banks standing at a distance from the farm. I represent a constituency where farmers have to travel a considerable distance from one part of the farm to another, and I can assure the right hon. Gentleman that I have had many representations from the occupants of such farms ever since this new tax was made, indicating the way in which they would be penalised. They have requested me to put forward on their behalf the strongest representations of which I am capable.
That is the only reason which compels me at this late stage to say a word in support of what has been said by the hon. Member for Orkney and Shetland and also by the hon. Member for Torquay (Mr. C. Williams), who spoke with first hand knowledge of conditions, particularly in the North of Scotland,

which to a certain extent resemble the circumstances in my own constituency. I hope that the right hon. Gentleman will give consideration to this matter. If he does he will be doing something on behalf of agriculture which he and his Government always tell us they are so desirous of doing.

Mr. Peter Thorneycroft: I wish to raise one point arising out of what was said by my hon. Friend the Member for Heeley (Mr. P. Roberts). As I understand it, the right hon. Gentleman said that the £12 licence was abolished altogether, and in future the farmer would be put into the position of an ordinary road haulier. That is a most unfortunate position for any man to find himself today. The ordinary road haulier is at the mercy of the transport monopoly. If a road haulier wants to go above 25 miles he has to apply to the Transport Commission and do all sorts of things, and is generally turned down. I have a letter from Sir Cyril Hurcomb to the effect that in the future pretty well nobody is to be allowed beyond 25 miles. I consider the matter ought to be cleared up. There may be some perfectly good explanation, but at the moment I am a little concerned because we should not like anybody else to find themselves in the same unfortunate position as the road hauliers.

Mr. Gaitskell: We are not here dealing with "A", "B" or "C" licences in the sense the hon. Member for Monmouth (Mr. P. Thorneycroft) seemed to suggest. We are concerned simply with the Excise Duty. I am surprised that the hon. Member, who so frequently speaks for the road hauliers, should be objecting, as I understand it, to this Clause. The imposition of the 15-mile limit is in fact to protect the hauliers from what might otherwise be unfair competition by the farmers. These discussions took place over a considerable time and I am quite sure that there was a feeling among the road hauliers that there would be unfair competition from the farmers.
Regarding the point raised by the hon. Member for Torquay (Mr. C. Williams), I ask the Committee to leave the matter as it stands. It is the result of fairly lengthy negotiations. I agree that there may be one or two cases where farms are very remote and where there will be inconvenience if the 15-mile limit is


imposed. But I think that the hon. Member will agree that we are here concerned wholly with tractors, and it is not likely that they will travel a long distance on the roads. The suggestion that special arrangements should be made or certificates issued would result in cluttering up the administrative machinery too much, and I do not think that we can contemplate an additional administrative burden of the complexity which would necessarily be involved.

Mr. P. Thorneycroft: May I ask the right hon. Gentleman to whom application is to be made for the agricultural licence?

Mr. Gaitskell: To the licensing authority.

Mr. Brendan Bracken: Which one?

Mr. Thorneycroft: Is it the commissioner or the licensing authority?

The Minister of Transport (Mr. Barnes): The commissioner—

Mr. Thorneycroft: One right hon. Gentleman says the commissioner and the other one says the licensing authority.

Mr. Gaitskell: What my right hon. Friend the Minister of Transport was about to say was that it has nothing to do with the commissioner.

4.15 p.m.

Mr. C. Williams: I do not wish to make any trouble about this, but I hope that the right hon. Gentleman will at least promise to look into this matter. I quite realise the administrative difficulties, but it is not a matter of one or two instances in Scotland; it is a very wide question which may affect hundreds of people. I ask him to consult with the Minister of Transport, who at any rate knows me well enough to know that I would certainly not wish to clutter up the machinery of any office with additional staff—rather the reverse.
If we are trying, as is being done with a considerable amount of success, to encourage Highland farming, a matter of this sort ought to receive careful consideration. The Minister should consult with the Secretary of State for Scotland and the Minister of Transport. I do not think that is an unfair thing to ask.

There are also some cases in England and it is essential that in these matters we should try not to make special hardships. I hope he will have some consultation with the Scottish authorities in this matter between now and the last chance we shall have of discussing it.

Mr. P. Roberts: May I ask the Minister to reconsider the decision to abolish the £12 licence altogether? It seems to me that all the difficulties I am pressing will be overcome if he would maintain the £12 licence, so that those who wished to pay it and take their goods further than the 15-mile limit would be enabled to do so. Otherwise, so far as I can see, the Minister will upset certain farmers who have already laid down their transport arrangements to be covered by the £12 licence. I cannot see why he should wish to abolish that licence, because if it were retained he would get more revenue.

Mr. Spence: The Minister has said that the £12 licence is to be done away with. Can he explain what will be the position of a contractor who uses his tractor and threshing machine all over the countryside as is very often the case in Scotland? Will there be a licence available for that contractor, now that the £12 licence is to be done away with?

Mr. Gaitskell: If the hon. Member will look at subsection (2), paragraph (iv), he will see that the £2 licence can be applied for hauling articles required for a farm by the owner,
or a contractor engaged to do agricultural work on the farm by the owner or occupier of the farm.
So that a contractor in that case would be covered by the £2 licence.

Question put, and agreed to.

Clause read a Second time.

The Chairman: The Amendment which it is proposed to call is in the name of the hon. Member for Westmorland (Mr. Vane), and perhaps it would be convenient to discuss it together with the next Amendment, also in the name of the hon. Member for Westmorland in subsection (4, b) at the end to insert, "timber and other woodland produce."

Mr. Vane: I beg to move as an Amendment to the proposed


new Clause, in subsection (4, a) at the end, to insert, "and woodlands."
Up to the present the law governing the licence duty payable by agricultural and forestry tractors has attempted to maintain an artificial distinction between the two as if they were entirely separate industries; instead of branches of the same industry, if I may use the metaphor, which very frequently overlap.
The old 5s. licence had a number of advantages but it also had some bad points. One of those was that it constituted an open invitation to all farmers to break the law. The right hon. Gentleman will remember that if one paid 5s. and hauled behind a tractor only as much as a load of firewood, or a few fencing stakes, or a small quantity of timber from a spinney on a farm, one was breaking the law. There must be tens of thousands of persons owning tractors who only paid a 5s. licence and who frequently broke the law.
This new Clause does go some way to meet this disadvantage but not the whole way. We even allow osiers to be loaded on a trailer behind a tractor licensed at the new rates. Why should the twigs of the willow be given this privilege while a man who happens to be hauling branches of the willow which are to be used in the chip basket trade, or the more noble part of the tree which is designed to be made into a cricket bat, immediately breaks the law and becomes liable, I suppose, to heavy penalties? However, that is what we are now being asked to welcome.
In spite of this feeble step forward, any farmer who hauls behind a tractor licensed at the £2 rate any woodland product whether from a small or large wood which he happens to work in conjunction with his farm, will still find himself breaking the law. Thousands of farmers will find themselves in that position every year. If he wants to keep within the law and he looks up the rate he is asked to pay, he does not find that he will have to pay just the next higher rate, because that is a privilege reserved for showmen's vehicles. He will be asked to pay the highest rate of all. Hence while he is doing his best to grow timber, which at the present time is a very scarce and much needed product indeed in this country, he will be rated far

more highly than someone who takes his coconut shies from one part of the country to another. I am quite certain hon. Members are not prepared to approve that.
I hope the right hon. Gentleman will not say that if he widens this Clause so as to allow the haulage of timber he will be causing undue wear and tear to the roads, because as the Clause is at present drafted a man can take as many hundreds of tons of sugar-beet as he likes to the station, provided it is not more than 15 miles from his farm; yet if he hauls one load of timber he finds himself once again outside this new law. I think that the 15-mile limit is ingenious, and although certain arguments can be adduced against it there are certain others to be said in its favour. One of them is this. I believe it is the view of the right hon. Gentleman that to widen the Clause in order to give benefit to the forestry branch of the industry, will be very difficult to administer "because it will be difficult to distinguish between the tractor which is used, if I may so put it, to carry out acts of husbandry and the tractor which is owned and used as a specialised vehicle, and which may be employed day in and day out on the main road dragging logs from one part of the country to another.
Now that the right hon. Gentleman has invented the 15-mile limit that difficulty is immediately solved, because I do not think the very heavy tractor, for which there are special licence rates in the consolidating Act of last year, or the specialised vehicles which some members of the timber trade possess, would ever come within this category, because no one would want to limit himself to using them within a 15-mile radius. I therefore do not think that that difficulty, which has been represented by the right hon. Gentleman before as being a very big one, any longer holds.
It is certainly true that a substantial part of the woodlands of this country which are privately owned are worked separately from any particular agricultural holding, but I would remind the right hon. Gentleman that more than a third of our farms are owner-occupied, that a very large proportion of those include quite a considerable area of wood land, and that the proportion of the total farms in that sort of occupation is increasing year by year. At the same time, I


ask him to bear in mind that the timber situation in this country is critical—so critical, in fact, that there has never before been such a strict control of felling in peace-time or in war as there is at present.
To meet that—although it may have escaped his attention—one of the right hon. Gentleman's colleagues, the Minister of Agriculture, through the Forestry Commission, the other day launched a new scheme to encourage all farmers to plant poplars along the edges of streams, along the edges of farm roads, in waste corners, and so on, as is the custom in large areas of Northern France, in Flanders, and indeed in North-West Europe generally, but which has not been the habit in this country up to the present. It is only in isolated cases that that practice may have been followed here. Only a matter of days ago the Minister of Agriculture not only invited farmers to make use of all these waste scraps and corners, but also offered a subsidy of 2s. a tree for a minimum of 200 poplar trees successfully planted on one farm in any one year.
That is virtually an invitation to every farmer in the country to see whether he can find an odd corner somewhere where he can make a contribution towards solving our timber problem. Unless the right hon. Gentleman meets us on these Amendments he is in fact saying that he proposes to wreck this scheme of the Minister of Agriculture in the first few days of its existence, it is quite impossible for anyone to consider planting poplar trees in the odd corners of his farm, or along the banks of any stream which may cross his farm, if he will not be able to look after those poplars properly and haul away the final timber unless he pays £35 or £40, or something of the sort, as a licence for his tractor. It simply rules the thing out altogether.
Although this new Clause goes some way towards meeting the grave disadvantages which lay in the old rules, I submit that it has not really gone far enough, and unless something further is done along the lines we suggest the right hon. Gentleman will have shown that it is not his intention to help the rehabilitation of our farm woodlands, which is most important today, and which I am quite certain is the intention of the majority of Members to aid.

Mr. M. Philips Price: First, I wish to thank the Chancellor for introducing this new Clause, which I am sure will be much appreciated by the agricultural community throughout the country. However, I also wish to support these Amendments, and to ask the Chancellor to consider whether he cannot go some way, if not the whole way, to meet the ideas embodied in them. As the hon. Member for Westmorland (Mr. Vane) pointed out, over a large part of the country there is a close association between forestry and agriculture. We are not faced, as they are in large parts of Scotland, or Wales for that matter, with great areas of woodland which are, as it were, economic units in themselves.
In the Midlands and the South of England there is this very close association; there are small estates on which there are both agricultural land and woodlands where the two are run closely together. Owner-occupying farmers have small woodlands and copses on their farms, and the Forestry Commission are trying to do all they can to encourage the growth of timber on these kinds of properties. Up to now, they have been very much neglected, and there is no doubt that, in the timber shortage with which we are faced at present, this kind of woodland property can provide a useful contribution to the solution of our problem.
4.30 p.m.
It is a fact that, over most of this kind of property, agricultural tractors are used for both agricultural and forestry operations, and we cannot separate the two. On one day, a tractor is ploughing or hauling sugar beet, and, on another day, it is hauling the thinnings of neighbouring woodlands, and if we try to separate the employment of the tractor on these two purposes, we shall land in hopeless confusion. The two things must go together. The hon. Member for Westmorland also asked why the osier should be exempted while the main trunk or body of the tree of which it is a shoot is not exempted, and there are hundreds of cases that could be quoted, such as the hauling of hedge stakes, barbed wire, piles and gate material from neighbouring woods, which are obviously part of general farming operations.
I agree that we do not want to encourage, or leave a way open for, farmers


to haul timber long distances and compete with contractors and thereby escape the larger duty, but I think the provisions which are being included in this new Clause will make it impossible for timber to be hauled in this way over long distances. It would be possible to haul it, perhaps, to a neighbouring railway station, but a 15-mile limit would prevent anything else. I hope the Chancellor will do all he can to meet this point, because it is very desirable that small woodlands should beencouraged in view of the timber shortage, and because, in actual fact, the operations of agriculture and small forestry are very closely interwoven.

Mr. Gaitskell: I have listened to the points made by the hon. Member for Westmorland (Mr. Vane) who moved this Amendment and to the views of my hon. Friend the Member for Gloucestershire, West (Mr. Philips Price), and I think I can probably save the time of the Committee by saying that, in principle, we are prepared to accept the proposition that a farmer who has woodlands on his farm and who uses a tractor for hauling the produce of those woodlands, if necessary taking it 15 miles in order to sell it, should have the benefit of this £2 rate. I think that is really what the hon. Member for Westmorland wanted, but, as my hon. Friend has said, we have to be rather careful in drawing the line so as not to let in all timber contractors, which clearly is not the purpose of this Amendment. If the hon. Gentleman will be so kind as to withdraw the Amendment, we shall have a look at the wording and put down our own Amendment on Report.

Mr. Vane: Can the right hon. Gentleman define a little more clearly what he means by the word "farmer"? I agree that we do not want to encourage the man who buys timber in one part of the country and delivers it to another, because that is a contracting business. However, as the hon. Gentleman opposite has said, the industries of agriculture and estate woodland management really merge together, and I hope that the right hon. Gentleman will not be too narrow in his interpretation, so that his new Clause will only include an odd spinney half the size of this Chamber. I want it to include something bigger than that, even if it excludes the Forestry Commission, which,

the Committee may like to know, does not pay Excise Duty at all.

Sir Ralph Glyn: It is more important today to grow poplars for matchwood than it has been at any other time, and the Board of Trade are trying to encourage in every way they can the growing of poplars for that purpose and have issued a paper which gives details of the scheme. Presumably, this has been approved by
the Treasury, and I think that every farmer who has land suitable for this purpose should take up this scheme, because growing poplars helps to drain the land as well as other things. It is of great importance to the farmer, not only from the point of view of forestry but from other points of view as well.

Colonel Clarke: May I ask the Minister if, when thinking over the definition of the word "farmer" for which my hon. Friend has asked, he will consider whether it would include the home farm on an estate, so that tractors from the home farm could be used on the woodlands? I understood him to say that, but I am not quite certain that it does cover the home farm.

Captain Crookshank: I think the right hon. Gentleman has met the point made by my hon. Friend who moved the Amendment, and I am grateful that the Minister has said that he will accept the idea behind it. My hon. Friend is very knowledgeable on forestry questions. We all know that there must be some limit and that we must not allow people to carry timber all over the country, but that was not the point that we have in mind at all. The right hon. Gentleman has said that he will consider the matter and put down his own Amendment later on. Therefore, unless there are any other novel points to be raised I suggest that my hon. Friend should withdraw his Amendment and reserve the right to criticise at a later stage if he does not like the Amendment which the Government put down.

Mr. Gaitskell: I am much obliged to the right hon. and gallant Gentleman, and I was going to suggest that myself. I think that points raised since I spoke last have showed the need for precise definition, and I can assure the hon. Member for Westmorland that that is our


intention. It is our intention to cover woodlands where they are ancillary to or part of a farm. We are quite agreed about that, but I should like time to consider the wording, because we must be careful not to make too wide a breach. If hon. Members will leave it like that, we shall put down an Amendment on Report stage, when, if they do not like it, we can have another discussion.

Captain Crookshank: If, as the right hon. Gentleman will probably agree, he is not such an expert on this problem as my hon. Friend the Member for Westmorland and the hon. Member for Gloucestershire, West, perhaps he will take them both into consultation if he is in any difficulty?

Mr. Gaitskell: I shall be very happy to do so.

Mr. Vane: In view of the generous way in which the Minister has met the point of the Amendment, I beg to ask leave to withdraw.

Amendment, by leave, withdrawn.

Clause added to the Bill.

New Clause.—(ROAD VEHICLES AND ROAD VEHICLE CHASSIS (PURCHASE TAX).)

.—(1) As from the nineteenth day of April, nineteen hundred and fifty, the enactments relating to purchase tax shall have, and be deemed to have had, effect as if in Group 35 in Part I of the Eighth Schedule to the Finance Act, 1948, there were omitted the whole of sub-paragraphs (i) to (iii) of paragraph (a), with the exception of the word "First" in the second column, where last occurring.
(2) As from the first day of July, nineteen hundred and fifty, the said enactments shall have, and be deemed to have had, effect as if there were added—

(a) as a new paragraph (d) in the said Group 35 the entry:—
"(d) Road vehicle chassis, mechanically propelled First … …";
(b) as a new paragraph 5 in the Fourth Schedule to the Finance Act, 1946 (which sets out the classes of goods relevant to the provisions about the application of chargeable processes), the entry:—


5. Road vehicle chassis, mechanically propelled.
(4) For the purposes of the said enactments a chassis designed for a mechanically propelled vehicle shall be deemed to be mechanically propelled, whether or not complete with an engine and other parts and accessories required for the purpose, and the expression road vehicle chassis" shall include so much of a chassis-less road vehicle as may be determined by the Commissioners to be in effect chassis, and references to a vehicle's chassis shall be construed accordingly.

(4) The Schedule (Purchase tax: supplementary provisions as to road vehicle chassis and road vehicles) to this Act shall have effect for the purpose of the purchase tax in respect of road vehicle chassis, and for the purpose of adjusting contractual rights in certain cases in relation to purchase tax in respect of road vehicles.
(5) Subsection (2) of this section may be varied or revoked—

(a) in so far as it amends the Eighth Schedule to the Finance Act, 1948, by an order of the Treasury under section twenty-one of that Act;
(b) in so far as it amends the Fourth Schedule to the Finance Act, 1946, by an order of the Treasury under section sixteen of that Act;

as if it had been contained in such an order, and an order varying or revoking the said subsection (2) or the said Group 35 may, in connection therewith, vary or revoke any provision of subsection (3) of this section or of Part I of the Schedule (Purchase tax: supplementary provisions as to road vehicle chassis and road vehicles) to this Act.—[The Solicitor-General.]

Brought up, and read the First time.

The Solicitor-General (Sir Frank Soskice): I beg to move, "That the Clause be read a Second time."

This Clause imposes Purchase Tax on the chassis of new vehicles. I do not think that the Committee would want me to repeat the reasons which have already been fully canvassed why this tax is imposed upon the chassis of new vehicles. The object of the Clause is merely to carry out a proposal which my hon. Friend the Financial Secretary made in an earlier Debate on the subject of the taxation of commercial vehicles. The Clause is to be read in concert with the Schedule which appears later on the Order Paper and which contains the machinery provisions for actually imposing the tax. The tax will fall upon the chassis of any new completed goods vehicles.

Mr. P. Thorneycroft: This Clause, so far as I can understand it, accurately brings into effect the undertaking given by the Chancellor of the Exchequer when we discussed Clause 13, but we think that, in this form, the Clause is only one degree less objectionable than was Clause 13. This is a most mischievous proposal, and I think that most hon. Members regard it as a limited concession. It is a formidable imposition upon the road haulage industry. The Minister for Economic Affairs has estimated that the cost will involve a rise of some 3½ per cent. in transport costs. I am glad to


see that the Minister of Transport is in his place, because I hope that, when we have Ministers from various Departments present in the Chamber, we might have the opportunity of hearing from them on this particular matter.
All I need say at this stage, because we shall have an opportunity later of discussing some of the more detailed objections, is that we are very far from satisfied about this Clause. We regard it as one which is calculated to put up costs and prices in this country, with very bad effects on the pocket of the housewife and wage demands. In fact, it is contrary to everything that the right hon. and learned Gentleman maintains he is trying to do. In such circumstances, we shall not have the slightest hesitation in dividing the Committee against the Clause.

Several Hon. Members: Several Hon. Members rose—

The Chairman: We had a very long Debate on this matter on Clause 13, and we shall have a further opportunity on the Schedule. I thought that the Committee was, on the advice of the hon. Member for Monmouth (Mr. P. Thorneycroft), willing to come to a decision.

Sir W. Wakefield: I wish to raise a point which was not raised before. I do not know whether it is desirable to do that now or later, but if, of course, I can raise it now, I will not raise it later. The point I wish to put to the Chancellor is why a Purchase Tax reduction cannot be granted in respect of London taxicabs because, there is no Purchase Tax charged on passenger vehicles.

Sir S. Cripps: On a point of order. This has absolutely nothing to do with taxicabs. It could not conceivably have anything to do with taxicabs.

Sir W. Wakefield: Further to that point of order. Surely, Major Milner, the question of Purchase Tax to be paid on London taxicabs is relevant to the discussion because, after all, taxicabs are commercial vehicles in so far as they carry fare-paying passengers.

The Chairman: This Clause, I understand, applies only to goods vehicles.

Mr. Summers: I am well aware that many of the arguments against the principles on which the other Clause

was founded have already been dealt with at some length by hon. Members on both sides of the Committee. I do not wish to detain the Committee by going over at any great length the various points of principle which are still inherent in this Clause just as much as they were in the Clause for which this has been substituted.
I want to draw attention to one particular aspect of this question of principle which I do not think was referred to in the earlier speeches on this subject, or dealt with in any detail. The Clause and the principles that lie behind it are unique in two particular respects. The first, a tax upon capital, has already been dealt with, and the second is the fact that it is in relation to the investment programme—

Sir S. Cripps: On a point of order. As I understand it, Major Milner, at the time we discussed Clause 13 it was proposed by you that we should stop the Debate because the matter could be debated later. The Committee agreed that matters of principle should be debated on Clause 13 and that we would deal with matters of detail when we came to the new Clause and the Schedule attached to it. In those circumstances, therefore, is it in order for the hon. Gentleman opposite to revert to the discussion of principle?

The Chairman: It may be strictly in order, but as there was an understanding, naturally the Committee would wish to keep to that understanding. I hope, having regard to the very large number of Clauses and the time that they will take up, that that will be so.

Mr. Lyttelton: Further to that point of order. I was not in the Committee until a minute or two ago, but I am sure that my hon. Friends and I have no wish to be repetitive on matters which have already been covered. However, I want to make it quite clear that as we are against the principle of the tax, we wish to have an opportunity of dividing against this particular Clause. It is for you, Major Milner, of course, to judge whether we are repetitive or not.

The Chairman: It is not only a question of being repetitive, but a question of there being an understanding that there would be no repetition of what was said on the previous Clause. I cannot prevent hon. Members committing a breach,


whether it be small or large, of that understanding, but I understood from the hon. Member for Monmouth that he was expressing the view of the Opposition on the matter when he indicated that a Division was desired. We can, of course, have a Division forthwith if that is the wish of the Committee.

Mr. P. Thorneycroft: I hope you will forgive me saying so, Major Milner, but I had no intention of expressing, nor would it have been in the slightest degree proper for me to do so, the views of hon. Members on this side of the Committee and so deprive them of the opportunity of putting forward their views. If this discussion is allowed to continue, I think we can get through this Clause in a quarter of an hour and get on to the next one.

4.45 p.m.

Sir W. Wakefield: I now have the Clause in front of me, which I did not have at the time the Chancellor of the Exchequer suggested that what I was saying was not in order. The marginal note says:
Road vehicles and road vehicle chassis.
There is no mention of commercial vehicles in this connection. In those circumstances, therefore, I submit that it is in order for me to discuss Purchase Tax on a road vehicle, whether on a body or a chassis.

The Chairman: I am sorry but the marginal note is not part of the Bill.

Mr. Summers: I think, in as much as I started by saying that it was not my intention to repeat a number of the arguments already adduced against the principle underlying this Clause, that the interjection of the right hon. and learned Gentleman has wasted far more time than if he had allowed me to continue my speech, in which case I should have resumed my seat long since.
Although I deprecate as much as anybody the lamentable effect of this Clause on the costs of transport and believe that not one lorry will be diverted to export as a result of it, there is only one aspect of this matter to which I want to draw attention. We have been told that the reason why the tax on commercial vehicles is desirable is because the investment programme has gone all wrong

through the increase of sales over forecast to the tune of some £37 million. All the statements which I have read and listened to on the subject suggest that the total investment programme for last year has gone wrong because of the combined circumstances of the production and sale of commercial lorries. That is quite untrue.
What, in fact, has happened is that a number of items of investment have been far less than the forecast and that the item relating to commercial lorries has been substantially more than was forecast, with the results that the intentions overall in regard to investment have not differed materially from the intentions of the right hon. and learned Gentleman. I should have thought that it would have been much more in the national interest had he paid attention to those who have, in fact made less than he intended should be made, rather than concentrate on the increased productivity brought about in this particular industry.
The other point is that referred to in paragraph 118 of the Economic Survey for 1950. There, we are told that investment in new plant has to be curtailed excessively to allow for the replacement of old plant which will inevitably have to continue to be used. I wish to draw the attention of the Committee to the following words in that paragraph:
In the revised programme new work has had to be reduced proportionately more than total investment because expenditure on maintenance and replacement forms a considerable part of gross investment in the United Kingdom "—
Is particularly want to draw the attention of the Committee to the words which follow—
and must, in many instances, have a first claim on investment resources.
A very large number of the commercial vehicles which have been sold have, in fact, been replacements of old ones. If the intentions of the Government in this White Paper are to be relied upon, that is a first charge on our investment resources. In those circumstances, the censures on that industry for exceeding a forecast would appear to be completely out of place. I want to register my protest at the arrogant assumption that the claims for investments are more likely to be—

The Chairman: The hon. Member is really going far beyond the new Clause before the Committee. The hon. Gentleman is not entitled to continue on those lines.

Mr. Summers: As I understand it, this Clause is based on certain principles, and whatever may be the understanding between the several sides of the Committee I put it to you, Major Milner, that what I am saying is as much in order as similar remarks on the preceding Clause.

The Chairman: In my opinion, the hon. Gentleman's remarks were not in order. This is a matter which, in essence, is confined to a question of a specific Purchase Tax. As I understand him, the hon. Gentleman is going into the wide ramifications of industry.

Mr. Summers: What I was saying was that the justification put forward for a tax on commercial vehicles is directly related by statements of right hon. and hon. Gentlemen opposite to a breach in the investment programme, which this particular section has, in fact, carried out. It is with that justification that I concluded by saying that here we find a number of traders taking the view that the cost of production will be reduced if they replace their old lorries. In contrast, we find the planners saying that if they do that it will be a bad thing. I want to protest against the arrogant assumption that in these questions the planners are right and the combined wisdom of traders all over the country, anxious to reduce costs, is regarded as wrong.

Brigadier Peto: I sat through the entire Debate on Clause 13 and I was anxious to make one or two remarks on this topic. Whether there was any agreement or otherwise I do not consider that I am bound by any agreement which would prevent me from not representing the views put to me by my constituents. As such I propose to—

The Chairman: If every hon. Member took that view it would never be possible to carry out any of the many understandings that have to be carried out for the good governance of the House.

Mr. John Foster (Northwich): On a point of order. I have turned up what was said at the time. I should have thought that it did not amount to an understanding.

The Chairman: Perhaps the hon. and learned Member would allow the hon. and gallant Member for Devon, North (Brigadier Peto) to continue. I am at the. moment looking up that point to which the hon. and learned Member for Northwich wishes to refer me. If we could allow hon. Members to continue with their speeches I should be grateful.

Mr. Foster: On a point of order. I was trying to submit that no engagement had been arrived at. In order to establish that point, I was proceeding to refer you, Major Milner, to a column of the Official Report which I quite appreciate
you are able to turn up for yourself. But that was not the point of my intervention. The point was to draw a deduction from what had been said, and to submit to you, that no understanding had been reached. I referred you to the column so that you should be able to follow it. I submit therefore that that is a point of order.
The column is 584 of Thursday the 15th. There you did say:
… the appropriate way to deal with it would foe for the Amendment to be withdrawn and the present Clause negatived and then we could later discuss the proposed new Clause.
Then my right hon. Friend the Member for Aldershot (Mr. Lyttelton) said:
May I say that would not be agreeable to us …"—[OFFICIAL REPORT, 15th June, 1950; Vol. 476, c. 584–585.]
and he went on to say that we should like to discuss the principle, and that details could be considered on the Schedule.

Colonel Ropner: I am sure it is the desire of both sides of the Committee that any agreement that was entered into should be carried out. Are we to understand that it is part of the function of the Chair to enforce an agreement of that sort?

The Chairman: Quite the contrary. I do not think the Chair can enforce anything of that sort. It is a matter for the good sense of the Committee. The position here is that the principle was fully discussed, and ought not to be repeated. If there be any details, it would appear that the proper time for discussing those details is on the Schedule.

Mr. Lyttelton: At the time these interchanges took place we had not seen the


new Clause. It was not on the Paper. That is very germane to this particular discussion.

Brigadier Peto: I always find it extremely difficult to speak in the House of Commons, but I find it even more difficult when so many points of order and one thing and another are raised at the earliest part of my speech.
Nevertheless, I intend, with your permission, Major Milner, to put forward very briefly certain views which I have collected during the past week-end from traders, merchants and trade associations in my constituency. They have consulted me and they have advised me as to the repercussions of the proposed 33⅓ tax on chassis. They regard it as a punishment of traders who, up till now, have tried their best to supply and to serve people in the district. They cannot see why they should have this penal tax put upon them, and they bitterly resent it. They were asking me what I thought of it. I told them I consider the Chancellor of the Exchequer is like a headmaster, who has a small boy in front of him who has not done anything much, and who says, "I am not going to expel you, but I am going to beat you on the chassis instead." They seem to think that about hits the nail on the head.
In addition to that, I have had correspondence from the Chamber of Commerce at Ilfracombe. They raised a particular point. The Ministry of Food keeps a very close watch on charges made in the milk distributive trade—down to two decimal points of a penny, I understand. A few months ago the charges were reduced. When the 9d. tax was put on petrol these were restored. Now, there is going to be a further claim on account of the increased cost of commercial vehicles. That is but another instance of a cost that will be bound to fall ultimately on the consumer. People are thinking now that the cost of living is too high. This is one more example of Government action that is going to put that cost up. On these grounds, I shall certainly vote against this Clause.

Mr. David Renton: Like my hon. and gallant Friend the Member for Devon, North (Brigadier Peto), I sat here for two and a half hours when the original Clause was discussed last week.

I had many points which I then wanted to put, but I intend to show the forbearance which, I am sure, both sides of the Committee would wish. I shall confine my remarks to two points not yet put on the original Clause, or on the one we are now considering.
The first point is on the original Clause and is by way of challenging a statement which was made by the Financial Secretary when speaking of Clause 13. He said that this tax was not intended to be permanent, and I see that the OFFICIAL REPORT records that several hon. Members laughed. Of course, it is obviously a matter about which one would laugh, because most taxes, when they are first introduced, are not intended to be permanent. The purpose of most taxes is not primarily revenue producing when they are first introduced. The have some other purpose, as we are told that this tax has.
5.0 p.m.
I invite the Committee to look ahead to the days when we may wish to encourage the expansion of the production of commercial vehicles in this country. I am not saying whether we are necessarily following a restrictionist policy, but one day we may want an expansionist policy. Let us guard against the possibility that when that day comes the Chancellor of the Exchequer will say, "No, you cannot remove this tax on commercial vehicles. We want it for the production of revenue."

The Chairman: I hope the hon. Gentleman will apply his argument to the new Clause.

Mr. Renton: I am just making this one point, which I agree is on the general principle, but I am trying to put it very briefly. I would call in aid of the argument which I am adducing a remark made by the Chancellor on the Second Reading of the Finance Bill, when he said that we are now raising something like £200 million a year in Purchase Tax and added that if anyone wished to reduce that Purchase Tax he would have to find some other means of raising the revenue. I suggest that we should not commit the Treasury to relying upon this tax for the purpose of raising revenue, knowing quite well that we may very quickly wish to take it off, and that when we want to do so some £10 million will have to be found from elsewhere. That is my first point.
My second point is this, and concerns only the new Clause. It is, as hon. Members will have observed, in very complicated terms, and the form of this Clause differs significantly from the form of the original Clause 13. That Clause sought to amend the Finance Act, 1948, but we now find that the Finance Act, 1946, is invoked and has to be amended as well. The inner meaning of the total net result is not very easy for hon. Members to understand. I find some difficulty in trying to ascertain the exact implications of this new Clause. When we have a complicated provision of this kind before the Committee it is usual, as indeed it is also very helpful, if someone on the Government Front Bench will explain the exact implications.
I was hoping that the Solicitor-General would explain to us exactly how the Finance Act, 1946, was brought in and why it was necessary to bring it in when the matter appeared to be covered be an Amendment to the Act of 1948. Perhaps if we can have such an explanation now it may save time in the long run, because it may help us to understand rather better than we otherwise should the also complicated terms of the new Schedule which is on the Order Paper and which we shall have to consider in detail at a later stage. I hope I have justified taking up these few minutes to press the Government to do that.

Lieut.-Commander Gurney Braithwaite: When this Clause was moved, Major Milner, you were good enough to give the Committee the advantage of your guidance by suggesting that points of controversy might be reserved until we reached the Schedule. I wish to confine my very brief remarks to the draftsmanship of the new Clause which we shall be passing if we give it a Second Reading. It is, after all, the residuary legatee of Clause 13 deceased. It is the Government's effort to produce new wording. It represents the retreat made on the subject of commercial vehicles which, if translated into terms of human functions, would mean that we are all taxed in future on the torso rather than on the other parts of our anatomy.
I would ask the Solicitor-General, who, presumably, advised the Government on this matter, whether something could be done to improve subsection (3), if nothing

else. There have been imported into our language during the past 50 years, owing to the French being a jump ahead of us in motor matters, certain French words such as "garage" and "chauffeur." I think that "chassis" must come among them. But what is to be said of an Act of Parliament which contains this definition:
… the expression 'road vehicle chassis' shall include so much of a chassis-less "—
what a fearful hybrid—
road vehicle as may be determined by the Commissioners to be in effect chassis, and references to a vehicle's chassis shall be construed accordingly.
One sympathises with those who have to do the construing.

Mr. Poole: It is perfectly plain.

Lieut.-Commander Braithwaite: The hon. Member for Perry Barr (Mr. Poole) is a master of lucidity and, when I sit down, no doubt can explain to us exactly what subsection (3) means and how it is to be interpreted. In the meantime, lesser mortals than he are in order in raising this point in the Committee.
I support my hon. and gallant Friend the Member for Devon, North (Brigadier Peto) who gave a striking example of how a boy might be chastised upon the chassis. How agreeable it would have been—or would it have been?—when we were at school if we had been chassis-less on occasions and yet "determined by the Commissioners to be in effect chassis." We should do something before we let this Clause pass. This is nothing to do with the merits of the matter. It is merely a question of draftsmanship which shows every sign of haste as a result of the demise of Clause 13 and the attempt of the Government to produce a substitute. I think so highly of the Solicitor-General that I am sure he will now leap to his feet to tell us that between now and the Report stage he will produce a new Clause which is at least comprehensible.

The Solicitor-General: I do not think that I can add anything to the general arguments that have been advanced in the course of this discussion, and, with the permission of the Committee, I will confine myself to the last two speeches which dealt with the rather more technical aspects of the drafting of this Clause.
As will be known by hon. Members who consider the Purchase Tax legislation, it is complicated, and it is complicated for this reason: the tax falls upon the wholesaler or the manufacturer, except in the case where he is selling the chargeable article to another registered wholesaler or manufacturer who wants to take it into stock or use it as materials for chargeable goods which he produces. Therefore, when one drafts a new Clause one has to take account of that situation. One has to deal with these two alternative situations: one where the chargeable point of time—that is to say, the point of time at which the tax falls—arrives when the article in question is still a chassis; and the other when the chargeable point of time arises when the chassis has become incorporated into a vehicle.
Most of these rather complicated Clauses are simply designed to bring this about. When the chargeable point of time arrives when the chassis has not yet become incorporated into a vehicle, the tax is then charged upon the chassis. That is comparatively simple. When, however, the chargeable point of time comes, when the chassis is part of the vehicle, if one looks at the Schedule which deals with the sale of the vehicle one finds that a vehicle is to be treated simply as if it were the sale of a chassis. That is why there is all this complicated drafting.
When I speak about "The chargeable point of time" I should explain what I mean. "The chargeable point of time" is an expression sometimes used in connection with this sort of legislation. When a wholesaler is selling to a retailer that is the time when the tax falls to be charged in a transaction of this sort. But when the wholesaler sells to another registered purchaser who wants it for stock the chargeable point of time—the point of time at which the tax charge arises—does not arise until that purchaser has himself made up the chassis into another article which constitutes a chargeable article. The charge is imposed when he sells the completed, chargeable article.
When we are trying to impose a tax on a chassis what we have to do is to calculate the wholesale value of the chassis when the chassis is no more than a chassis at the point of time the tax falls upon it. We charge the wholesale value of the chassis. But at the chargeable point of time, perhaps, the chassis has

already become part of a whole vehicle, and we have then only to charge that part of the whole vehicle which constitutes the chassis element in it. That is brought about by paragraph 3 of the Schedule.
The remaining paragraphs of the Schedule deal with provisions which are designed to bring about a separation of what is a chassis and that which are extraneous additions to chassis. If hon. Members will look at paragraph I they will see what the additions are—the driver's cab, accumulators which are used for the purpose of supplying the power to propel the chassis, and so on. It is necessary, because the tax is upon the wholesale value of the chassis alone when there are a whole lot of accretions, to specify them so that they can be separated from the chassis itself. That is the reason for paragraph 1 of the Schedule. The only other part of the Schedule to which I shall refer is paragraph 3 (2), which is that part which defines what a goods vehicle is. I think it is comparatively straightforward. [Laughter.] I said "comparatively;" I did not say "straightforward" alone. If one fits in the various exceptions set out in the Eighth Schedule of the Finance Act, 1948, one sees that it works into a comprehensible result.
The last paragraph enables Purchase Tax to be remitted when the chassis becomes part of a vehicle, which is not a commercial vehicle and which is not a vehicle upon which Purchase Tax falls. That is a necessary provision, because if a chassis is not sold as part of a commercial vehicle no tax is paid on it.
If we go back to the new Clause it will be seen that all it does is introduce that Schedule. The hon. and gallant Member for Bristol, North-West (Lieutenant-Commander Braithwaite) made some reference to the word "chassis-less" and without saying that I agree with the general criticism put forward, I agree with remarks about the artistic character of the expression. This is when there is a strengthened body which includes the chassis as part of it. For example, in some makes of tanker vehicle that state of affairs is found, and paragraph 1 (3) is designed to deal with that. A composite structure of that sort constitutes a strengthened body, which incorporates a chassis, and the chassis cannot really be separated from the body because it is part of one and the same structure. Then when we are imposing the tax we


notionally sub-divide the vehicle, and we have to ask ourselves what portion of this composite structure is to be regarded as a chassis. If that is not done it is not known What is to be charged. What is to be charged is only the wholesale value of the chassis, and that is the object of this paragraph.
I accept that this is extremely complicated drafting, and I wish it were possible in some form or another to draft it in more simple language. I can assure hon. Members that I have said to the draftsmen very much the same as hon. Members have said to us this afternoon. It really is impossible, if one goes into the structure of Purchase Tax legislation, to reduce it into more simple language than it is and I am very sorry that it should appear in this form. However, it is quite unavoidable.

5.15 p.m.

Mr. Hollis: If we were more confused as to the meaning of this Clause before the Solicitor-General spoke to the Committee, we are in a much greater state of confusion now. It is more than a comic point. If it is really impossible to draft this legislation in such a way that it is unintelligible to the Solicitor-General, to anybody in this Committee, or indeed, to anyone in this country, surely that is a very good argument against the legislation. If it were some form of a personal excuse on the part of the right hon. and learned Gentleman we would be delighted with it, but it goes beyond that, and what we are concerned about is whether it is wise or foolish to put this utterly unintelligible legislation through Parliament. It is utterly unintelligible as it is now.
The right hon. and learned Gentleman made the distinction between a chassis that is no more than a chassis and what was an addition to a chassis. That was simple enough, but then we had something which was more than a chassis and which raised the question of a chassis-less body. We are told that when there is extra strength in a body that includes a chassis, for some reason or another this extra strong body should be called chassis-less, yet it is deemed to be a chassis within the meaning of the Act. We do not wish to delay the work of the Committee this afternoon. We have a lot of business to get through, and the last thing that is desired is for the Committee to be flippant. The Chancellor of the Exchequer

seemed to object to our debating this Clause at all, but all these matters could not have been debated before this wonderful farrago of rubbish went into the Bill, because this is a new concession which the Chancellor made to us. I would go into the Lobby against this new Clause on its intrinsic merits, but apart from those intrinsic merits it is insulting to the people of this country to pass this Clause in its present form, for it is absolute rubbish.

Mr. Poole: I confess that when the hon. and gallant Gentleman the Member for Holderness was speaking I said that the Clause was perfectly clear to me. It was very much clearer to me then, having read it, than it was after I had heard my right hon. and learned Friend the Solicitor-General. To me it is perfectly simple and clear, though I confess to having a revulsion of feeling against Parliamentary draftsmen in the normal course of events. Hon. and right hon. Gentlemen have always claimed that they are business men, but apparently they have a prime ignorance of modern production methods in the motor car industry. That is really exactly what they are showing us, and it has been revealed by every speech that they have made.
This Clause is perfectly simple, for this reason. Under normal motor car construction, prior to the recent innovations, a motor car chassis was made and the body builder fitted the body on it. They were two perfectly separate pieces of work. It was easy to see what portion of the cost of a vehicle was represented by the construction of the chassis, and what was the portion of the cost which fell upon the body. Today, however, there are many motor cars which carry no chassis, and which are chassis-less, for the simple reason that the whole body is pressed out and the ancillary parts, springs and wings, are fastened to what is really the body: there is no chassis in the way in which one normally understands the term.
I should have thought that many bon. Members opposite would have been familiar with these facts. Will they tell the Committee what is wrong with the description in the Clause of the case of that type of construction? I am not an expert in this work, but I have seen the process by which the whole body in one transaction is pressed out of one piece of


steel. How is it possible to decide what portion of that one engineering operation forms the chassis and what forms the body?

Mr. Hollis: That is exactly what is intended here.

Mr. Poole: I will come to the point now. In the Clause it says that:
… the expression 'road vehicle chassis' shall include so much of a chassis-less road vehicle….
Let us substitute for "chassis-less road vehicle" the words "stamped out or pressed out body." Then the Clause would read:
… the expression 'road vehicle chassis' shall include so much of a stamped out or pressed out body as may be determined by the Commissioners to be "—
what would have been the chassis if the chassis had been provided.
I am sorry that I cannot help hon. Members to make up for their deficiency in understanding, but if they would really seek to understand subsection (3) rather than to find some levity in its draftsmanship, and if they had an elementary knowledge of the methods operating in the motor car industry today, they would not have the slightest difficulty in understanding why it has been necessary to have this Clause to make provision for that type of vehicle which is made without any chassis but is pressed out of one piece of steel in one operation.

Sir H. Williams: When I listened to the Solicitor-General I thought I was dreaming, and that I was listening to the Prime Minister explaining the Schuman Plan. Apparently I was wrong. Now we have had at our disposal the great experience of the technical expert about chassis-less chassis, but I am still in some difficulty. I am glad that my hon. and gallant Friend the Member for Bristol, North-West (Lieut.-Commander Braithwaite) drew attention to the words
… for a mechanically propelled vehicle shall be deemed to be mechanically propelled whether or not complete with an engine and other parts …
In other words, these mechanically propelled vehicles, whether mechanically propelled or not, are all known to the expert on motor car construction. I think I understand that a little bit.
There is, however, a point here to which my hon. and gallant Friend did not draw

attention, and that is that the interpretation of these words and of the vehicles is to be left, without anybody understanding it at all, to be determined by the Commission. This is a serious constitutional point. I happen to have one business connection where we deal a good deal with Purchase Tax. I must not go on to the general principles, but this Clause raises them, because this is to be a decision made by the Commissioners, and decisions made by the Commissioners are sometimes quite fantastic. I could quote illustrative examples of the complete folly of the decisions that are made.
It seems to me that Parliament is abdicating its responsibility—or will be if it passes this new Clause. There is not to be any Statutory Instrument embodying the decisions of the Commissioners. We are simply saying that all this stuff that none of us understands—and even the Solicitor-General admitted that he did not understand it, and that he had protested to the draftsmen about the unintelligibility of the wording—is to be interpreted by a Commission in decisions that will not be debateable here. All this is unintelligible, or has become unintelligible, even to the Solicitor-General. The Chancellor of the Exchequer finds himself quite incapable of defining these things in precise terms, and so he his handing the baby, or the chassis-less chassis, or whatever it is, to the Commissioners.
I do not think that the Commissioners ought to have these powers to determine something which Parliament ought to determine. I think this is a monstrous abdication of our constitutional responsibility. We must remember that at the moment we are engaged in discussing the Second Reading of a Clause. We are not on a Clause in Committee but on Second Reading. If we pass the Second Reading we could have a further discussion on the Question, "That the Clause be added to the Bill," but on the Second Reading of a Clause, as on the Second Reading of a Bill, the discussion is of necessity very wide.
We are entitled to ask why the Clause has been put down. The main reason is because of the arrogance of the Chancellor of the Exchequer. I am sorry he has gone out. I meant him to hear this; I hope he will read it. He has stated that there are too many of these vehicles in the country. He said so in his Budget


speech. It is a monstrous piece of impertinence for any Minister to dictate to the people who is to have a motor vehicle. I do not like it. He had the ambition he expressed in a book about 15 years ago, to the effect that there should be one Act of Parliament under which it would be possible to issue orders. Has he entirely abandoned that attitude of mind? Now he says there are too many commercial vehicles. But people buy commercial vehicles because they think they can usefully use them. It is much better that they should decide that than that the Chancellor of the Exchequer should decide it for them. I do not like this attitude at all, and when I say I do not like it I am speaking, as I know, on behalf of a vast number of people who have written to me about it, and for a vast number of people who have written to other hon. Members.
This is a thoroughly bad Clause. It will put up the cost of living. It will add substantially to the rates of my own borough, and to the rates of everybody else's borough. It imposes additional expense on the municipal authorities. Its purpose is not to make revenue. The purpose is to try to force people to do something other than that which they wish to do. It is totally undemocratic. I think people ought to make their own choices. I certainly much prefer making my own choice as to whether or not I need or will purchase a commercial vehicle, to being dictated to by the Chancellor of the Exchequer. I am against the Clause in principle. It is thoroughly bad. It will disturb the economy of the nation, and is a piece of impertinence designed to dictate the way in which we conduct our lives.

Viscount Hinchingbrooke: The hon. Member for Perry Barr (Mr. Poole) said that we on this side of the Committee were ignorant of the methods of modern motor car manufacture. The very reverse is true. We understand the way in which modern motor cars are assembled; and that is why we are complaining against this Clause, which, in terms almost approaching those of the Athanasian Creed, tries to tell us to believe what we know is incomprehensible. The Chancellor of the Exchequer has really got himself into very great difficulties today. First he came down here and withdrew the tax because he

wanted to exempt the body builders, whom he knew could not be taxed successfully because of their diversity.
Now he is forced into the position where he cannot find the terms which will be understood by any legal authority or even by the Commissioners for Inland Revenue themselves, in which to describe how these vehicles, which we all know under modern methods are assembled together, can possibly be separated for the purpose of tax. This only goes to reinforce our argument that not only on the aspect of the bodies is this tax ridiculous and wrong, but it is also wrong on the aspect of the chassis themselves. We know perfectly well that when the Government get down to the business of exacting the tax from the chassis manufacturers, they will be in exactly the same series of difficulties, if not worse, than they would have been if they had left the position as it was. That reinforces our demand that the tax as a whole should be withdrawn.

5.30 p.m.

Mr. Foster: There is one great difficulty about the chassis of the "chassisless" vehicles, and it is that on the vehicles with chassis there are certain conditions which are described in the Schedule. In the case of the one-piece vehicles about which the hon. Member for Perry Barr (Mr. Poole) spoke, I appreciate that the object of the Clause is to enable the Commissioners to decide which part of the one-piece vehicle is chassis and which is not. I followed the Solicitor-General on that point. If the hon. Gentleman looks at the Clause again, I think he will see that there is nothing to stop the Commissioners deciding that things like cabs, which in the Schedule are permitted to be added to the chassis, can be added by the Commissioners to this notional chassis.
The Commissioners take a one-piece vehicle and there is no limitation at all on their discretion. They may say, "In this one-piece vehicle, this will be the chassis," and they may include the cab. But with a vehicle with a separate chassis and body, under the Schedule they are not allowed to put the cab. Surely, that is wrong. As my hon. Friend the Member for Croydon, East (Sir H. Williams) said, the Commissioners should at least have some restriction on their discretion. They should not be able to decide that the


whole lorry is a chassis. There must be some principle.
The root of the fallacy is that there is no decision of what is a chassis in either branch of this Clause. There are certain things which one is not allowed to count as part of the chassis, including the driver's cab. There is nothing to describe whether other things are part of the chassis or not. I am no expert on lorries, but I can well imagine certain articles attached to a chassis which the Solicitor-General would say were part of the chassis and which I would say were not part. The more obvious ones are mentioned in the Schedule. They include a driver's cab, accumulators, turntables, coupling gear or equivalent mechanism. But, surely, in the case of chassis-less vehicles the Commissioners must be helped to decide what is and what is not subject to tax.
I ask the Chancellor to look at this matter again and to bring out the definition of chassis, to apply it separately, and then to help the Commissioners by saying, "Such part of a vehicle as in the case of a vehicle without chassis would be equivalent to a chassis." I think that he needs words like that to help him to make the Clause clear. This position shows how hopeless this tax is. The Chancellor is determined in his view, which we on this side of the Committee say must be wrong, that it is over-investment to buy new commercial vehicles to replace old and antiquated vehicles. Because he has got what I call this insane principle in mind and he introduces a Clause which does not work out at all. If he does not accept that principle, at least let him introduce a Clause which makes sense.

Mr. P. Roberts: There is one point which constitutes a grave danger. We have had a rigmarole of words, but nothing has been said about what will happen when the Government try to take off this tax. They have already said that they cannot deal with the coach builders, and we know for what a long time the chassis are in the hands of the coach builders. A great deal of hardship will be caused to that industry if or when the Government want to take off this tax. The chassis goes to the coach builder and it may be with him for three or four months whilst he is putting on the body.
If the tax comes off, the coach builder may be left with many vehicles on which tax has been paid. Of course, anyone who wanted to buy a lorry at that time would not buy a vehicle on which the tax had been paid. Obviously, they would buy the cheaper one without the tax. The coach building industry may be left with thousands of vehicles on which they have paid Purchase Tax for the chassis. We have considered this problem before when Purchase Tax has been taken off other goods. The Government will find it a most difficult problem to solve. In fact, it may be so troublesome that a future Chancellor may say, "We cannot take Purchase Tax off these lorries because we know the trouble we should have."
This Debate must have shown to the Government that this form of words really will not do. I ask the Minister not to take the line that because the Clause is on the Order Paper it must go through. I ask him to consider the arguments we have presented and to reconsider the Clause with the idea of deleting some of the obvious anomalies. Otherwise, with firm conviction, I shall go into the Division Lobby to vote against it.

Lieut.-Commander Braithwaite: This valuable discussion arose out of a modest plea on my part a few minutes ago for clearer draftsmanship. I think that the result has been valuable to the Committee. The hon. Member for Perry Barr (Mr. Poole), who interrupted me on a previous occasion, has done his best to explain this Clause. May I say to him in passing that I no longer have the honour to represent Holderness? Like himself, redistribution has caused a translation. What the electors of Perry Barr have done for him, the electors of Bristol, North-West, have done for me. We both find ourselves transplanted.
I thought that the hon. Member for Perry Barr was somewhat harsh in his comments upon what was said by the Solicitor-General whom I have always found to be a most painstaking Law Officer. No Law Officer in my experience has ever been more assiduous in his duties. In explaining the abstruse language of the various Bills which he has had to pilot in the last five years, a great strain has been placed upon him and his ingenuity. I thought that the right hon.


and learned Gentleman was not only conscientious this afternoon but revealing. He confessed that he found his task impossible. Coming from a Law Officer of the Crown, I thought that that was guidance to the Committee which it would be most unwise for us to turn down. When the hon. Member for Perry Barr said that he understood the Clause until the Solicitor-General intervened, I thought that that was a matter for a Wednesday meeting upstairs. With the Government's present slender majority, I should have thought that it was a matter for the Lord President of the Council.
There is one lesson which emerges from this discussion. There is a Law Officer of the Crown, well versed in his task and in his profession, who has failed in spite of all his efforts to explain this new Clause. Let us not blame the Solicitor-General. The new Clause was hastily put together following the demise of the original Clause 13. It bristles with anomalies. I shall not return to this chassis-less problem which confronts the Committee. One cannot make bricks without straw and one cannot make bodies without chassis. It is all very difficult and abstruse. I should have thought that there were two courses open to the Government as a result of this discussion. The first is to drop the tax, which is obviously unworkable; the second is that, if they persist in this curious hybrid arrangement, the Clause as at present drafting should be withdrawn and an effort made on the Report stage to put it into intelligible language.

After all, the Minister of Town and Country Planning is no longer at the Treasury. We were accustomed in his time there to curious phrases which could be interpreted in one way or another; very much like the interpretation of the Minister of Town and Country Planning of the Schuman plan and the Socialist Party's attitude towards it. I am quite sure that this short discussion has been valuable, if only because it has shown that the new Clause is not only quite incapable of interpretation, but that the tax itself is quite incapable of being operated.

Mr. Michael Astor: I want to make one small point and to ask a question. I wonder whether the Chancellor of the Exchequer, when enacting his principle that there were too many of these vehicles on the road, consulted with the Minister of Transport from the point of view of public safety. I know that in the part of the country where I live, the small men who are for the most part using light commercial vehicles are driving vehicles which are a danger to the public. I have talked to garage owners and to tradesmen about this, and the opinion I have conflicts completely with the principle which the Chancellor of the Exchequer established in making this tax. I should be grateful to know whether he did consult the Minister of Transport and whether his opinion is the same as mine on that point.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 287; Noes, 276.

Division No. 32.]
AYES
[5.45 p.m.


Acland, Sir Richard
Braddock, Mrs. E. M.
Cripps, Rt. Hon. Sir S


Adams, Richard
Brockway, A. Fenner
Crosland, C. A. R.


Albu, A. H.
Brook, D. (Halifax)
Crossman, R. H. S.


Allen, A. C. (Bosworth)
Brooks, T. J. (Normanton)
Cullen, Mrs. A.


Anderson, F. (Whitehaven)
Broughton, Dr. A. D. D.
Daggar, G.


Awbery, S. S.
Brown, George (Belper)
Daines, P.


Ayles, W. H.
Brown, T. J. (Ince)
Darling, G. (Hillsboro')


Bacon, Miss A
Burke, W. A.
Davies, A. Edward (Stoke, N.)


Baird, J.
Burton, Miss E.
Davies, Ernest (Enfield, E.)


Balfour, A.
Butler, H. W. (Hackney, S.)
Davies, Harold (Leek)


Barnes, Rt. Hon A. J
Callaghan, James
Davies, R. J. (Westhoughton)


Bartley, P.
Carmichael, James
Davies, S. O. (Merthyr)


Bellenger, Rt. Hon. F. J
Castle, Mrs. S. A.
de Freitas, Geoffrey


Benson, G.
Champion, A. J.
Deer, G.


Beswick, F.
Chetwynd, G. R.
Delargy, H. J.


Bevan, Rt. Hon. A. (Ebbw Vale)
Clunie, J.
Diamond, J.


Bing, G. H. C.
Cocks, F. S.
Dodds, N. N.


Blackburn, A. R.
Coldrick, W.
Donnelly, D.


Blenkinsop, A.
Collick, P.
Donovan, T. N.


Boardman, H.
Cook, T. F.
Driberg, T. E. N.


Booth, A.
Cooper, G. (Middlesbrough, W.)
Dugdale, Rt. Hon. J. (W. Bromwich)


Bottomley, A. G
Cove, W. G.
Dye, S.


Bowden, H. W.
Craddock, George (Bradford, S.)
Ede, Rt. Hon. J. C.


Bowles, F. G. (Nuneaton)
Crawley, A.
Edelman, M.




Edwards, John (Brighouse)
Lee, Miss J. (Canneck)
Roberts, Goronwy (Caernarvonshire)


Edwards, Rt. Hon. N. (Caerphilly)
Lever, L. M (Ardwick)
Robertson, J. J. (Berwick)


Edwards, W. J. (Stepney)
Lever, N. H. (Cheetham)
Robinson, Kenneth (St. Pancras, N.)


Evans, Albert (Islington, S. W.)
Lewis, A. W J. (West Ham N.)
Rogers, G. H. R. (Kensington, N.)


Evans, E. (Lowestoft)
Lewis, J. (Bolton, W.)
Ross, William (Kilmarnock)


Evans, S. N. (Wednesbury)
Lindgren, G. S.
Shackleton, E. A. A.


Ewart, R.
Lipton, Lt.-Col. M.
Shawcross, Rt. Hon. Sir H


Fernyhough, E.
Logan, D. G.
Shinwell, Rt. Hon. E.


Field, Capt. W. J.
Longden, F. (Small Heath)
Shurmer, P L E.


Finch, H. J.
McAllister, G.
Silverman, J (Erdington)


Follick, M.
MacColl, J. E.
Silverman, S S. (Nelson)


Foot, M. M.
McGhee, H. G.
Slater, J.


Forman, J. C.
McInnes, J.
Smith, Ellis (Stoke, S.)


Freeman, J. (Watford)
Mack, J. D
Snow, J. W.


Freeman, Peter (Newport)
McKay, J. (Wallsend)
Sorensen, R. W.


Gaitskell, Rt. Hon. H. T N
Mackay, R. W. G. (Reading, N.)
Soskice, Rt. Hon. Sir F


Ganley, Mrs. C S
McLeavy, F
Sparks, J. A.


Gilzean, A.
MacMillan, M K (Western Isles)
Steele, T.


Glanville, J. E. (Consett)
McNeil, Rt. Hon. H.
Stewart, Michael (Fulham, E.)


Gooch, E. G.
MacPherson, Malcolm (Stirling)
Stokes, Rt. Hon. R R


Greenwood, A. W. J. (Rossendale)
Mainwaring, W. H.
Strachey, Rt. Hon. J


Greenwood, Rt. Hn. Arthur (Wakefield)
Mallalieu, E. L. (Brigg)
Strauss, Rt. Hon. G. R (Vauxhall)


Grenfell, D. R.
Mallalieu, J. P. W. (Huddersfield, E.)
Stross, Dr B.


Grey, C. F.
Mann, Mrs. J.
Summerskill, Rt. Hon Edith


Griffiths, D. (Rother Valley)
Manuel, A. C.
Sylvester, G. O.


Griffiths, Rt. Hon. J. (Llanelly)
Marquand, Rt. Hon. H. A
Taylor, H. B. (Mansfield)


Gunter, R. J.
Mathers, Rt. Hon. George
Taylor, R. J. (Morpeth)


Hale, J. (Rochdale)
Mellish, R. J
Thomas, D. E (Abordare)


Hale, Leslie (Oldham, W.)
Messer, F.
Thomas, George (Cardiff)


Hall, J. (Gateshead, W.)
Middleton, Mrs. L
Thomas, I. R. (Rhondda, W.)


Hall, Rt. Hn. W. Glenvil (Colne V'll'y)
Mikardo, Ian
Thorneycroft, Harry (Clayton)


Hamilton, W. W
Mitchison, G. R
Thurtle, Ernest


Hannan, W
Moeran, E. W
Timmons, J


Hardman, D. R
Monslow, W
Tomlinson, Rt. Hon G


Hardy, E A.
Moody, A S
Tomney, F


Hargreaves, A
Morgan, Dr. H. B
Turner-Samuels, M


Harrison, J.
Morley, R.
Usborne, Henry


Hayman, F. H
Morris, P. (Swansea, W.)
Vernon, Maj W F


Henderson, Rt. Hon A. (Rowley Regis)
Morrison, Rt. Hon. H. (Lewisham, S.)
Viant, S P.


Herbison, Miss M.
Mort, D. L
Wallace, H W


Hewitson, Capt. M.
Moyle, A.
Watkins, T. E.


Hobson, C. R
Mulley, F. W
Webb, Rt. Hon. M. (Bradford. C.)


Holman, P.
Murray, J. D.
Weitzman, D


Holmes, H E. (Hemsworth)
Nally, W.
Wells, P. L. (Faversham)


Houghton, Douglas
Neal, H.
Wells, W. T (Walsall)


Hoy, J.
Noel-Baker, Rt. Hon. P. J.
West, D. G.


Hubbard, T.
Oldfield, W. H
Wheatley, Rt. Hn. John (Edinb'gh, E)


Hudson, J. H. (Ealing, N.)
Oliver, G. H
White, Mrs. E. (E. Flint)


Hughes, Emrys (S. Ayr)
Orbach, M
White, H (Derbyshire, N. E.)


Hughes, Hector (Aberdeen, N.)
Padley, W. E.
Whiteley, Rt. Hon. W


Hughes, Moelwyn (Islington, N)
Paling, Rt. Hon. Wilfred (Dearne V'lly)
Wigg, George


Hynd, H. (Accrington)
Paling, Will T. (Dewsbury)
Wilcock, Group-Capt. C. A. B


Hynd, J. B. (Attercliffe)
Pannell, T. C
Wilkes, L.


Irvine, A. J. (Edge Hill)
Pargiter, G. A.
Wilkins, W. A.


Irving, W. J. (Wood Green)
Parker, J.
Willey, F. T (Sunderland)


Janner, B.
Paton, J.
Willey, O. G (Cleveland)


Jay, D. P. T
Pearson, A.
Williams, D. J. (Neath)


Jeger, G. (Goole)
Pearl, T. F.
Williams, Ronald (Wigan)


Jeger, Dr. S. W (St. Pancras, S.)
Poole, Cecil
Williams, Rt. Hon. T. (Don Valley)


Jenkins, R. H.
Popplewell, E
Williams, W. T. (Hammersmith, S.)


Johnson, James (Rugby)
Porter, G.
Wilson, Rt. Hon. J H (Huyton)


Johnston, Douglas (Paisley)
Price, M. Philips (Gloucestershire, W.)
Winterbottom, I. (Nottingham, C.)


Jones, D. T. (Hartlepool)
Proctor, W. T
Winterbottom, R. E (Brightside)


Jones, Frederick Elwyn (West Ham, S.)
Pryde, D. J
Wise, Major F. J


Jones, Jack (Rotherham)
Pursey, Comdr. H



Jones, William Elwyn (Conway)
Rankin, J.
Woodburn, Rt. Hon. A


Keenan, W.
Rees, Mrs. D.
Woods, Rev. G. S.


Kenyon, C.
Reeves, J.
Wyatt, W. L.


Key, Rt. Hon. C. W.
Reid, T. (Swindon)
Yates, V. F.


King, H. M.
Reid, W. (Camlachie)
Younger, Hon. Kenneth


Kinghorn, Sqn.-Ldr E
Rhodes, H.



Kinley, J.
Richards, R
TELLERS FOR THE AYES:


Lee, F. (Newton)
Robens, A
Mr. Collindridge and




Mr. Royle.




NOES


Aitken, W. T.
Baldock, J. M.
Bevins, J. R. (Liverpool, Toxteth)


Alport, C. J. M.
Baldwin, A. E.
Birch, Nigel


Amery, J. (Preston, N.)
Banks, Col. C.
Bishop, F P.


Amory, D. Heathcoat (Tiverton)
Baxter, A. B.
Black, C. W.


Arbuthnot, John
Beamish, Maj. T. V. H
Boles, Lt.-Col. D. C. (Wells)


Ashton, H. (Chelmsford)
Bell, R. M.
Boothby, R.


Assheton, Rt. Hon. R. (Blackburn, W.)
Bennett, Sir P (Edgbaston)
Bossom, A. C


Astor, Hon. M.
Bennett, R. F. B. (Gosport)
Bowen, R.


Baker, P.
Bennett, W. G (Woodside)
Bower, N







Boyd-Carpenter, J. A.
Hinchingbrooke, Viscount
Orr-Ewing, Charles Ian (Hendon, N.)


Bracken, Rt. Hon. Brendan
Hirst, Geoffrey
Orr-Ewing, Ian L. (Weston-super-Mare)


Braine, B.
Hogg, Hon. Q.
Osborne, C.


Braithwaite, Lt.-Comdr. J. G.
Hollis, M. C
Perkins, W. R. D.


Bromley-Davenport, Lt.-Col. W.
Holmes, Sir J. Stanley (Harwich)
Peto, Brig. C. H M


Browne, J. N. (Govan)
Hope, Lord J.
Pickthorn, K.


Buchan-Hepburn, P. G. T.
Hopkinson, H. L. D'A.
Powell, J. Enoch


Bullock, Capt. M.
Hornsby-Smith, Miss P.
Prescott, Stanley


Bullus, Wing-Commander E. E.
Horsbrugh, Miss F.
Prior-Palmer, Brig. O


Burden, Squadron-Leader F. A.
Howard, G. R. (St. Ives)
Profumo, J. D.


Butcher, H. W.
Howard, S. G. (Cambridgeshire)
Raikes, H. V.


Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
Hudson, Sir Austin (Lewisham, N.)
Rayner, Brig. R.


Carr, L. R. (Mitcham)
Hudson, Rt. Hon. R. S. (Southport)
Redmayne, M.


Carson, Hon. E.
Hudson, W. R. A. (Hull, N)
Remnant, Hon. P.


Channon, H.
Hulbert, Wing-Cdr. N. J.
Renton, D. L. M.


Churchill, Rt. Hon. W. S.
Hurd, A. R.
Roberts, Emrys (Merioneth)


Clarke, Col. R. S. (East Grinstead)
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Roberts, P. G. (Heeley)


Clarke, Brig. T. H. (Portsmouth, W.)
Hyde, H. M.
Robertson, Sir D. (Caithness)


Clyde, J. L.
Hylton-Foster, H. B.
Robinson, J. Roland (Blackpool, S.)


Cologate, A.
Jeffreys, General Sir G
Robson-Brown, W. (Esher)


Conant, Maj. R. J. E.
Jennings, R.
Rodgers, J. (Sevenoaks)


Cooper, A. E. (Ilord, S.)
Johnson, Howard S. (Kemptown)
Roper, Sir H.


Cooper-Key, E. M.
Jones, A. (Hall Green)
Ross, Sir R. D. (Londonderry)


Corbett, Lieut.-Col. U. (Ludlow)
Joynson-Hicks, Hon. L. W
Russell, R. S.


Craddock, G. B. (Spelthorne)
Kaberry, D.
Ryder, Capt. R. E. D


Cranborne, Viscount
Keeling, E. H.
Sandys, Rt. Hon. D.


Crookshank, Capt. Rt. Hon. H. F. C
Kerr, H. W. (Cambridge)
Savory, Prof. D. L.


Crosthwaite-Eyre, Col. O. E.
Lambert, Hon. G.
Scott, Donald


Crouch, R. F.
Lancaster, Col. C. G.
Shepherd, W. S. (Cheadle)


Crowder, F. P. (Ruislip-Northwood)
Law, Rt. Hon. R. K.
Smiles, Lt.-Col. Sir W.


Crowder, Capt. John F. E. (Finchley)
Leather, E. H. C.
Smith, E. Martin (Grantham)


Cundiff, F. W.
Legge-Bourke, Maj. E. A. H
Smithers, Peter H. B. (Winchester)


Cuthbert, W. N.
Lennox-Boyd, A. T.
Smithers, Sir W. (Orpington)


Darling, Sir W. Y. (Edinburgh, S.)
Linstead, H. N
Smyth, Brig. J. G. (Norwood)


Davidson, Viscountess
Liewellyn, D.
Soames, Capt. C.


Davies, Rt. Hn. Clement (Montgomery)
Lloyd, Rt. Hon. G. (King's Norton)
Spearman, A. C. M.


Davies, Nigel (Epping)
Lloyd, Maj. Guy (Renfrew, E.)
Spence, H. R. (Aberdeenshire, W.)


de Chair, 5.
Lloyd, Selwyn (Wirral)
Spens, Sir P. (Kensington, S.)


Deedes, W. F.
Lockwood, Lt.-Col. J. C.
Stanley, Capt. Hon. R. (N. Fylde)


Dodds-Parker, A. D.
Longden, G. J. M. (Herts, S. W.)
Stevens, G. P.


Donner, P. W.
Low, A. R. W.
Steward, W. A. (Woolwich, W.)


Douglas-Hamilton, Lord M
Lucas, Major Sir J. (Portsmouth, S.)
Stewart, J. Henderson (Fife, E.)


Drayson, G. B
Lucas, P. B. (Brentford)
Stoddart-Scott, Col. M.


Drewe, C
Lucas-Tooth, Sir H.
Storey, S.


Dugdale, Maj. Sir T. (Richmond)
Lyttelton, Rt. Hon. O.
Strauss, Henry (Norwich, S.)


Duncan, Capt. J. A. L.
McAdden, S. J.
Stuart, Rt. Hon. J. (Moray)


Dunglass, Lord
McCallum, Maj. D.
Summers, G. S.


Duthie, W. S.
McCorquodale, Rt. Hon. M. S.
Sutcliffe, H.


Eccles, D. M.
Macdonald, A. J. F. (Roxburgh)
Taylor, C. S. (Eastbourne)


Eden, Rt. Hon. A.
Mackeson, Brig. H. R.
Taylor, W. J. (Bradford, N.)


Elliot, Lieut.-Col. Rt. Hon. Walter
McKibbin, A.
Teeling, William


Erroll, F. J.
McKie, J. H. (Galloway)
Thomas, J. P. L. (Hereford)


Fisher, Nigel
Maclay, Hon. J. S.
Thompson, K. P. (Walton)


Fletcher, W. (Bury)
Maclean, F. H. R.
Thompson, R. H. M. (Croydon, W.)


Fort, R.
MacLeod, Iain (Enfield, W.)
Thorneycroft, G. E. P. (Monmouth)


Foster J. G.
MacLeod, John (Ross and Cromarty)
Thornton-Kemsley, C. N


Fraser, Hon. H. C. P. (Stone)
Macpherson, N. (Dumfries)
Tilney, John


Fraser, Sir I. (Lonsdale)
Maitland, Comdr. J. W.
Touche, G. C.


Fyfe, Rt. Hon. Sir D. P. M.
Manningham-Buller, R. E.
Turton, R. H.


Galbraith, Cmdr. T. D. (Pollok)
Marlowe, A. A. H.
Tweedsmuir, Lady


Galbraith, T. G. D. (Hillhead)
Marshall, D. (Bodmin)
Vane, W. M. F.


Gammans, L. D.
Marshall, S. H. (Sutton)
Vaughan-Morgan, J. K.


Garner-Evans, E. H. (Denbigh)
Maude, A. E. U. (Ealing, S.)
Vosper, D. F.


Gates, Maj. E. E.
Maudling, R.
Wade, D. W.


George, Lady M. Lloyd
Medlicott, Brigadier F.
Wakefield, E. B. (Derbyshire, W.)


Glyn, Sir R.
Mellor, Sir J.
Wakefield, Sir W. W. (St. Marvlabone)


Gomme-Duncan, Col. A.
Molson, A. H. E.
Walker-Smith, D. C.


Granville, E. (Eye)
Moore, Lt.-Col. Sir T.
Ward, Hon. G. R. (Worcester)


Gridley, Sir A.
Morris, R. Hopkin (Carmarthen)
Ward, Miss I. (Tynemouth)


Grimond, J.
Morrison, Maj. J. G. (Salisbury)
Waterhouse, Capt. C


Grimston, Hon. J. (St. Albans)
Morrison, Rt. Hon. W. S. (Cirencester)
Watkinson, H.


Grimston, R. V. (Westbury)
Mott-Radclyffe, C. E.
Watt, Sir G. S. Harvie


Harden, J. R. E.
Nabarro, G.
Webbe, Sir H. (London)


Harris, F. W. (Croydon, N.)
Nicholls, H
Wheatley, Major M. J. (Poole)


Harris, R. R. (Heston)
Nicholson, G.
Williams, C. (Torquay)


Harvey, Air-Codre. A. V. (Macclesfield)
Nield, B. (Chester)
Williams, Gerald (Tonbridge)


Hay, John
Noble, Comdr. A. H. P
Williams, Sir H G. (Croydon, E.)


Heald, L. F.
Nugent, G. R. H.
Wills, G.


Heath, Col. E. R.
Nutting, Anthony
Wilson, Geoffrey (Truro)


Henderson, John (Cathcart)
Oakshott, H. D.
York, C.


Hicks-Beach, Maj. W. W
Odey, G. W.
Young, Sir A. S. L.


Higgs, J. M. C.
O'Neill, Rt. Hon. Sir H.



Hill, Mrs. E. (Wythenshawe)
Ormsby-Gore, Hon. W. D
TELLERS FOR THE NOES:


Hill, Dr. C. (Luton)
Orr, Capt. L P. S.
Mr. Studholme and




Mr. Wingfield Digby.

New Clause.—(REDUCTION OF ENTERTAINMENTS DUTY IN CASE OF PUPPET SHOWS.)

Subsection (3) of section one of the Finance Act, 1935, as amended by subsection (1) of section seven and subsection (3) of section eight of the Finance Act, 1946, shall be amended by inserting the words "puppet and marionette shows" after the words "a travelling show."—[Lieut.-Commander Clark Hutchison.]

Brought up, and read the First time

Lieut.-Commander Clark Hutchison: The purpose of this Clause is to clarify the law in regard to the incidence of Entertainments Duty on puppet and marionette shows, and to ensure that in future this type of entertainment shall qualify for the reduced live rate tax concession which is given in the Finance Act, 1935, as amended by the Finance Act, 1946. There is no dispute that the law is in need of clarification. At the present time the rate of tax levied on these shows depends upon the decision of the local officers of the Department of Customs and Excise in whatever part of the country a display may be taking place.
The Financial Secretary, with whom I have had some correspondence on this matter, will perhaps recollect that in the final sentence of his letter to me on 31st March he agreed with my contention that there is a lack of uniformity by saying:
Instruction are being issued to Excise officers with a view to ensuring consistency of treatment in cases of this kind.
In passing, perhaps I might cite one or two examples of the kind of inconsistency that arises. In 1947, the Lee Puppet Theatre at Skegness paid the full rate of tax on the demands of the local Customs officer, and the same company has been requested to pay the full rate of tax during its present tour in Scotland. On the other hand, at Lowestoft in 1949 the Laurey-Lee Theatre was charged the reduced rate of tax, and in the same summer the Waldo-Lanchester Theatre at Malvern only paid the reduced rate of tax.
The Committee will be aware that the conditions under which the reduced rate of tax can be granted are laid down in Section 1 (3) of the Finance Act, 1935, as amended by the Finance Act, 1946, the relevant passage of which reads as follows:

The said Duty shall be charged at the reduced rates set out in the First Schedule to this Act in a case where all the performers whose words or actions constitute the entertainment are actually present and performing and the entertainment consists solely of one or more of the following items, namely, a stage play, a ballet (whether a stage play or not), a performance of music (whether vocal or instrumental), an Eisteddfod, a lecture, a recitation, a music hall or other variety entertainment, a circus, travelling show, a menagerie or any game or sport other than the racing or trial of speed of animals, vehicles, motor vessels or aircraft.
In the whole of that subsection there is no reference to puppet shows or marionette theatres.
I have looked through all the Debates in the OFFICIAL REPORT relating to the Entertainments Duty, but I can find no trace of this type of entertainment having been mentioned. That, no doubt, is one reason why there is this inequality in practice in various parts of the country in regard to the levying of the tax. I think I have said sufficient to indicate the need for clarifying the existing law.
6.0 p.m.
I now wish to advance some arguments to show why the reduced rate of tax should be levied in this field of entertainment. I group my arguments under three headings—the cultural value of this type of entertainment, craftsmanship and social service. I would remind the Committee that the puppet theatre is one of the most ancient forms of entertainment in the world and is, in fact, older than the living theatre itself. It was handed down from the ancient Greeks to the Romans and thence came later to France and Western Europe. The first puppet theatres were established in this country about the reign of Queen Elizabeth, almost a full century in advance of the better-known Punch and Judy shows which came from Italy in the time of the Stuart kings. The puppet and marionette type of entertainment has always been regarded as being of a very high kind and of the type which one finds at musical and dramatic festivals. I stress the point that it is one of those cultural recreations which is particularly encouraged by the Arts Council of Great Britain.
It may interest the Committee to know that one of the important items at the Edinburgh Festival of Music in the coming autumn will be the presentation of Professor Skupa's puppet theatre from


Prague which is one of the most famous companies in the world, and, incidentally, that entertainment will be exempt from tax altogether. I also draw the attention of the Financial Secretary to the fact that this very month at the Edinburgh Empire theatre the American Bernard Brothers are presenting a form of mime entertainment with no vocal dialogue, but with accompanying mechanical music off stage, and that form of entertainment is paying the reduced rate of tax. I ask hon. Members to bear that in mind in the light of what I shall say in a moment.
My second point is that the equipment and presentation of puppet shows is a highly skilled matter requiring real craftsmanship. There are some 200 or so puppet theatres in the country about half of which, I am advised, are professional companies. The other half are part-time amateur companies. So highly are they regarded by the Arts Council that no less than 60 of the professional puppet theatres have
been sponsored by the Arts Council in England, Wales and Scotland at one time or another during the past few years. Nearly all the puppet theatres are very small; sometimes, in the case of what is called a glove puppeteer, such as Mr. Walter Wilkinson, it is a one-man business, and in other cases it consists of two or three people as, for instance, the Lees or the Lanchesters. The entertainment is a live one because the proprietors have to construct and dress the marionettes which require to be manipulated by wires or strings or rods. There is also usually an accompanying dialogue.
The only possible objection which can be advanced to the argument that this is a live entertainment is that in some cases, although purely as a subsidiary part of the entertainment, use is made of recorded music such as one often finds in the living theatre, by means of mechanical musical devices like a gramophone off-stage. I would put it to the Committee that it is obviously impracticable for two or three people presenting a show in a puppet theatre to engage a living orchestra or choir.
My final point is in connection with the good social work which has been done by these puppet theatres in this country. As I have said, many of them undertake tours sponsored by the Arts Council—

tours to the industrial and outlying communities or to small communities where it would not be practicable for living theatrical companies to go. Recently, for example, one puppet show has been giving entertainments in mining areas in Scotland, using miners' welfare institutes as theatres. I think it is a very good thing that this type of traditional, high-grade entertainment should be given in all parts of the country which cannot be served by the ordinary living theatre. We should encourage that in every possible way by giving this reduced rate of tax concession. I would only add that it is a healthy and artistic type of entertainment and one specially suited to children. I am advised that in the recent tour by one of the Scottish companies in the mining areas, in Fife, Lanarkshire and Ayreshire, no fewer than 10,000 children attended the shows.
I have put forward the case for the reduction of tax from the full rate to the live rate as cogently as I can and I trust it will meet with sympathy from the Chancellor of the Exchequer. I believe that these puppet theatres are doing useful work in the field of entertainment, as well as work of a social and educational character, and I sincerely hope that the Government will see fit to give them the concession on the lines I have indicated.

Mr. Leslie Hale: The hon. and gallant Member for Edinburgh, West (Lieut.-Commander Hutchison) has put this matter so fairly, moderately and fully that I rise only because I feel that the Clause is one which deserves the consideration of the Committee and to support it from this side of the House. I am bound to say that I heard one observation which surprised me and it was that this matter has not been raised before. I had a fairly clear recollection in my mind that it had been raised before, but, although I have been trying to find it, it appears that I am wrong. Certainly it does not appear in the index. I rather thought that I had discussed this matter before and it may be that it arose incidentally in some discussion on Amendments to this Clause of the Finance Bill, of which we have had a very great number.
I can think of only one argument against the new Clause moved by the hon. and gallant Member and that is


equally an argument in its favour. I venture to suggest that, on a clear interpretation of the Acts of 1935, these shows should never have had tax levied on them at all, because I cannot think that, in the wide definition in Section 1 of the Act of 1935, "a travelling show," or a "variety entertainment," for instance, do not somewhere include the puppet and the marionette show.
However, if that tax has been levied, then it is still obvious that there must be clarification of the matter, because the hon. and gallant Member said, and I have no doubt with authority, that tax has in fact been collected on these shows in some circumstances. The Act of 1935 exempts all sorts of things which I would not call entertainment at all, although I agree that people have different tastes. Some people like listening to lectures and they are exempt. Musical performances now include those on the solo saxophone and on that abomination the harmonica, while this very charming form of culture and art for some reason has been overlooked. I ask the Chancellor who I know always looks on these matters with very real sympathy, to see whether he cannot accept the Clause and round off this matter.

The Financial Secretary to the Treasury (Mr. Douglas Jay): Both the hon. and gallant Member for Edinburgh, West (Lieut.-Commander Hutchison), and the hon. Member for Oldham, West (Mr. Leslie Hale), have spoken most eloquently and persuasively on this matter, and I would say straight away that we do not think, on the merits or in the spirit, that the puppet or marionette show should be excluded from the lower rate of duty which was enacted by the Act of 1935 for living entertainment. The difficulty has simply arisen over the terms of the Act and here it seems to have proved almost as difficult to define "living entertainment" as it was to define "chassis."
The offending words, as the hon. and gallant Member himself said, were those which he read out. It was necessary to determine whether, in the case of puppet and marionette shows,
all the performers whose words or actions constitute the entertainment are actually present and performing.
Secondly, there then arose whether the gramophone music accompanying these shows came within the terms of that

sentence. As the hon. and gallant Member knows from the correspondence we have had, the customs officers have, in fact, attempted to give the benefit of the doubt to puppet shows wherever they could, but obviously there is a point beyond which this Committee would not wish them to stretch the language of the Act.
We think, however, for those reasons, that a case has been made out for altering the law in this respect. We prefer, if possible, not actually to accept the hon. and gallant Gentleman's new Clause, because we do not want to go too far in admitting mechanical music, in case we give less preference to actual music where the performer is present than we should wish. We shall be very glad to try to introduce an Amendment in that spirit on the Report stage. I hope, with that assurance, that the hon. and gallant Gentleman will withdraw his proposed new Clause.

Lieut.-Commander Hutchison: I thank the Financial Secretary for the very conciliatory and helpful way in which he has met the case which I endeavoured to put forward. In view of his assurance I beg to ask leave to withdraw the Motion.

Motion, and Clause, by leave, withdrawn.

New Clause.—(AMENDMENT OF S. 40 (3) OF FINANCE ACT, 1930).

Subsection (3) of section forty of the Finance Act, 1930, shall be amended by the omission of the words "not yielding income."—[Mr. Colegate.]

Brought up, and read the First time.

Mr. Arthur Colegate: I beg to move, "That the Clause be read a Second time."

The Deputy-Chairman (Colonel Sir Charles MacAndrew): Perhaps in moving the Second Reading of the Clause the hon. Gentleman would combine with it the proposed new Clause standing next on the Paper in his name—[Exemption from Estate Duty of Buildings of Historic or Artistic Interest]—and the new Clause also in the hon. Gentleman's name—[Family Houses].

Mr. Colegate: I should like to do it, Sir Charles, if it would be for the convenience of the Committee, because it would enable me to put the object which I had in moving these proposed new Clauses in a very much simpler way.
The Chancellor of the Exchequer and his colleagues are in such a gracious mood today that I hope they will look upon my equally non-party suggestions as favourably as they have looked at that of my hon. and gallant Friend who has just gained his point. My object is to complete the code which deals with the exemption of artistic and historical property from Death Duties, under certain conditions. I would remind the Committee that this exemption began at the very start of Death Duties, in the Act of 1894, in which Section 15 (2) made it lawful for the Treasury to remit Estate Duty on works of art, etc. which were given or bequeathed for national purposes, to universities, and so forth.
It is clear that those who originated Death Duties had a twinge of conscience about what might happen when Death Duties were enlarged, on account of the dispersion of the great heritage of collections of works of art, which, in 1894, were unparalleled in any country in the world. These fears were only too well founded. As the years went by, the enormous heritage of magnificent works of art were dispersed, not merely to America but to Germany and France. The great collectors of France still seem even now to be able to buy objects of interest from this country.
The 1930 Act, in Section 40, went very much further and made a real contribution in this matter. It remitted Death Duties on these works or art whether they were bequeathed or given or not. The works of art could remain, and many of them have remained, in the hands of their owners, subject to certain conditions. The Chancellor of the Exchequer has gone still further in Clause 38 of the present Bill, where a provision is laid down which tightens up the conditions. It is obvious that if exemption from death duties is given to the owners of such property, it is only right that those owners should take the necessary steps to preserve the objects, and to give certain facilities for research and inspection.
6.15 p.m.
The 1930 Act, in Section 40 (3), however has words which cut off a whole section of the sort of things that we are considering this afternoon. Those words are:
not yielding income.

At first sight they appear to give protection to the Treasury and to the public against any attempt by a tax evader to take improper advantage of the Section, but when I analysed the situation I found that abuse would be practically impossible. I would remind the Committee that these historical and beautiful objects must, first of all, be inherited. We cannot buy them and make some profit on them. We must make a claim on the Treasury that they should regard them as exempt from Death Duties, and the Treasury have to accept that claim. The last word is therefore entirely with the Treasury. There can be no abuse of that Section, nor of the new Clauses which I am attempting to move, because the Treasury has complete control.

Mr. Astor: Am I right in thinking that among the objects referred to, upon which tax exemption is given, are those which have to come into the category of heirlooms?

Mr. Colegate: No, there is no question necessarily of their being heirlooms. They simply must be objects of historical, scientific or other interest which the officer or department at the Treasury appointed for the purpose decides come within the categories. Therefore, so far from protecting the public and the Treasury, the words "not yielding income" cut off quite definitely a certain class of property which is just as worthy as any other class of objects covered.

Sir S. Cripps: Would the hon. Gentleman tell us what class is cut off? I am really anxious to know.

Mr. Colegate: Yes, I am coming to that point. What is cut off is any kind of artistic or house property or building of architectural merit.

Sir S. Cripps: I do not think the Clause would apply to buildings, anyway.

Mr. Colegate: That is my object. That is why I have put down the new Clauses, and I hope that the right hon. and learned Gentleman will be good enough to look at them. I have used the word "buildings." One of the great heritages of this country is the great mass of architecture, not merely big houses but manor houses, tithe barns, etc. Any such building as attracted tax under Schedule A is excluded by those words from the


operation of this excellent method of protecting objects of interest which hon. Members on all sides of the Committee would wish to protect and which most of us have enjoyed when visiting such houses.
At the present time there is a tremendous movement of public opinion that beautiful houses, apart from the collections and works of art they contain, should be open to the inspection of the public. It is becoming a matter of almost universal desire on the part of owners of property that there should be adequate opportunity of seeing these buildings. In that case, surely the words "not yielding income" are a mistake, and I venture to think that they should be removed from the Clause. I do not profess to be a Parliamentary draftsman, and I realise that the new Clauses in my name might not achieve my object. The Chancellor must know that I should be only too willing to accept a form of words on the Report stage which he thought would accomplish my object.
I hope that the Chancellor will consider this because in the past he has shown very considerable sympathy in the matter. I think that he appointed the Gowers Committee. It may be asked why we should not wait for the Report of the Committee and it may be said that the Gowers Committee will go very much further than anything that I may do, but it could not go further on the question of exemption from death duties. Whether anything like this is recommended by the Committee or not, I still think we should take this action now because the rate of destruction which is going on is very rapid. In my own constituency in the last three years more than eight houses, three at least of which had great architectural merit, have been completely destroyed and demolished. There is no time to be lost.
I see no objection to going a little in advance of any recommendations which the Gowers Committee may make. I hope that the Committee will make other recommendations on the lines which I must not develop here, of the French law which preserves great chateaux in the valley of the Loire and elsewhere and which even provides funds for the maintenance of the structure by the owners. We could not go that far. Anyway, it would be out of order for me to develop it at this stage, but I hope very much that

the Chancellor will consider my Clauses and say whether he will introduce a form of words on the Report stage to achieve the objects which I have set out.
This is not a party matter. It is a matter in which, I am glad to say—my hon. Friend the Member for Twickenham (Mr. Keeling) will confirm this—there is a growing interest among all sections of the population, and owing to the development of the charabanc people in the lower income grounds are seeing more of the countryside and of the houses which adorn it. The consequence is this very great interest in the matter. When a place is demolished one can hear very great resentment expressed that there is no method of protecting it. I hope the Chancellor will consider the matter very carefully and say whether he can make a slight extension of the protection from Death Duties which has been afforded to objects of artistic, historic and scientific interest to the architectural beauties of the country in which most of us take so much delight.

Mr. Astor: I should like to make a short intervention to ask my hon. Friend another question. When I first read the Clause, I wished to support him because I believed it to be time that the position of the collector in the community—nobody stands up for him—should be safe-guarded, because the collector is the best patron of the arts, being infinitely better than any public body will ever be. However, my hon. Friend made a reference to the words "not yielding income" and said that when he first scrutinised the thing he thought it was a matter of tax evasion, implying that tax evasion was possible; but it seems to me, in all good faith, that anybody inheriting what they could turn into a private museum of this kind, which would be something which had immediately lost its personal sense in the terms of the private collector, could run a perfectly good tax racket if it were not for these words. That is the point which worries me. I do not see how it is possible to avoid tax evasion if we do not have these words. I am merely asking for guidance.

Mr. Colegate: I have looked into that matter and it is very difficult to conceive how one could make any money by such a method. First of all, one has to inherit the collection. Then one has to persuade


the Treasury to put it on their list, and they really have absolute control. I am not quite certain what the position would be, but I imagine that the Treasury might have powers to strike off the list any property which seemed not to be complying with the scheme. If the cost of maintenance was set off in the case of even the most delightful collection, I cannot conceive how one could make it a money-making racket.

Mr. Follick: What about stamp collecting?

Mr. Mott-Radclyffe: I hope the Chancellor will view the Clause with sympathy. My hon. Friend the Member for Burton (Mr. Colegate) made the point that by reason of the phrase "not yielding income" any house would be excluded from Section 40 of the Finance Act, 1930, because a house automatically attracts Schedule A, and that, presumably, in the minds of the Treasury would be technically deemed to be yielding income.
All in the Committee are aware of the value of the National Trust scheme in preserving houses and other buildings of historic importance, but, unless we are to be accused of being entirely materialistic and of failing to appreciate the architectural and art treasures which we possess, the time has come for concessions to be made outside the comparatively narrow scope of the National Trust scheme. I have no idea of what the Gowers Committee will report. I hope very much that it will recommend concessions to the owners of such houses and buildings.
However, all of us in the Committee agree that it is right and proper that the famous historic houses, together with their contents, should be preserved and kept intact, but I am not certain whether size or fame is necessarily the best or indeed the only yardstick by which to judge the artistic or architectural value of any building. I do not think it is. There are a great many smaller manor houses, farm houses, tithe barns and so on of immense architectural and historic value but which for various reasons are not acceptable to the National Trust, more often than not because any property made over to the National Trust must be endowed by the donor with sufficient capital to maintain it.

6.30 p.m.

Mr. Leslie Hale: Some of us on this side of the Committee have not referred to the Section which the Clause seeks to amend. If I follow the argument, is the suggestion behind this Clause that, for example, Chatsworth Park, fully occupied, and the whole hall, should be exempt from Estate Duty while every other house in the area should remain liable?

Mr. Mott-Radclyffe: No, if the hon. Gentleman will read the Section and the Clause he will see there should not be any misunderstanding about that. Chatsworth would come into a separate category altogether. It is a famous house and has a special value of its own. I am not arguing exclusively for the stately homes of England, as they are known in the popular Press, but for the smaller manor houses, farm houses, and other less well known buildings which together with their contents have great historic and architectural value.
There is often a tendency to underestimate how important it is to keep intact some of the priceless contents of these smaller manor houses. It is true that any of us can do and look at a picture in a picture gallery or at a piece of furniture in a museum, but I am certain that if one takes the picture or the piece of furniture out of its original setting, that furniture or that picture loses half its value, not in the financial sense but in the artistic sense. But we must bear in mind that the contents of a house, where both the exterior and the interior are good, reflects the history of taste throughout many centuries, from perhaps the Tudor period to Queen Anne, through the Georgian period to the Victorian period. We may prefer some periods to others, but so long as the contents of that house remain intact there we have the history of taste through a given period for everybody to see.
I should have thought that the safeguards against any abuse are perfectly adequate. No hon. Member on any side of the Committee would wish the objects which my hon. Friend seeks to achieve by this new Clause to be abused in any way but, as he said, there are perfectly adequate safeguards. In the first case the property has to be inherited and not purchased. Secondly, it has to be kept in a reasonable state of preservation.


Thirdly, it has to be open to examination by a person authorised by the Treasury. For those reasons I suggest that the right hon. and learned Gentleman should give sympathetic consideration to this Clause in order to avoid the houses and buildings of great merit being demolished, or falling into disrepair, their contents dispersed, and articles of great value being lost, both to their owners and to the public who may wish to see them.

Air-Commodore Harvey: I rise to support my hon. Friend. I can see the difficulties that the Chancellor would have in meeting us over such a wide problem, nevertheless I feel something ought to be done because, unless steps are taken to preserve these old homes, I believe this generation will be condemned in years to come. The incomes of most families are reduced today to such an extent that it is impossible even to attempt to maintain the large homes which are of priceless value to every person in the country, as has been proved in recent years by the thousands of people who take enjoyment and pleasure at weekends in visiting these homes. Efforts are being made by their owners to sustain them by charging 2s. or 2s. 6d. a visit.
While I do not wish to be out of order on this point, I would ask the Chancellor to consider this matter sympathetically by giving tax relief. Perhaps during part of the recent visit of the Prime Minister to France he was inquiring into the French method of maintaining the homes of France. I hope the Chancellor will give an assurance that he will look into this matter and, on the Report stage, give the House some idea of what can be done to preserve the homes of Britain.

The Solicitor-General: It was just because my right hon. and learned Friend recognised that this was an important question, with wide implications, that last year he set up the Gowers Committee within whose terms of reference it was not only to examine the position with regard to houses and buildings of historic and artistic interest, but also to examine the position with regard to the contents of those houses—objects, pictures, and so on, of artistic and historic interest. That Committee has just presented its report. It is intended to publish that report in due course, and no doubt there will have to

be full discussion upon its various proposals. As hon. Members opposite have said, this matter is by no means a simple one.
If I may begin with Section 40 of the 1930 Act, it would not improve the matter very much simply to take out the words "not yielding income" in subsection (3) of that Section. Those words, which have been in the legislation on this kind of topic for 153 years, are designed to prevent a person using his artistic treasures for the purpose of earning income while he is alive and, having earned income by the use or exhibition of them during his life, for his heirs to enjoy the advantage of exemption from Death Duties.
That Section is not, on its true construction, designed to refer to or to include houses. As my hon. and learned Friend said when the hon. Member for Burton (Mr. Colegate) was moving the Motion, what we refer to as the ejusdem generis rule would have to apply, and that Section takes in the pictures, prints' books, manuscripts, works of art, scientific collections and things of that sort. It is designed simply to deal with the contents of houses.
As the hon. Member has said, the Treasury has to say what objects of that character can be said to have artistic or historic interest, and it has been possible to operate that provision because there have been available the services of experts from the National Gallery and the Victoria and Albert Museum upon whose advice those responsible for the decision have been able to act. Supposing the scope of this type of legislation is extended to include historic buildings, there would have to be some body to which those who have to determine whether a building can be designated as having historic or artistic interest can refer. At the moment there is no obvious body, and no doubt some body for that purpose would have to be set up.

Mr. Colegate: I think the right hon. and learned Gentleman must have overlooked the fact that the Victoria and Albert Museum has an important architectural section. I have no doubt they would be delighted to advise the Treasury.

The Solicitor-General: I am told that particular section could not see its way to undertaking this additional function of


giving advice in the case of all these buildings, and, therefore, it would be necessary to set up some kind of body from whom that kind of advice could be obtained.
There is another point that would arise for consideration on this matter. Supposing one excluded from the scope of Death Duties large properties of great value, the question would have to be considered whether the State should not have some measure of control or supervision over those buildings to see that they were properly maintained and made available, in the sense in which it would be natural to expect that they should be made available, if tax exemption attached to them in that way. I am not simply stating these problems to give a mere stonewall refusal to what is being proposed by the hon. Member in the new Clause which he is putting forward. I am simply saying that I think it is premature now to accept what he suggests.
As I have said, this Committee, which has produced a very voluminous report and which has very fully and exhaustively examined all these problems and has made suggestions with regard to it, has just presented its report. The implications of that report, which will be published, will require study, and the kind of problems which I have been indicating will have to be resolved in the light of the suggestions of those who form the Gowers Committee. I hope, therefore, that this Committee will agree that it would be premature to accept any of the three new Clauses now. It would be premature to do so when we have this report to hand and when it can shortly be considered.
If we simply accepted the first of the three new Clauses, that really would not make very much difference. It would simply take out the words "not yielding income" and it would take out what the Committee may well think is not an unreasonable safeguard, namely, that if any particular owner of a picture, collection, or something of that sort, is to have tax exemption, he should not, at the same time, be able to use the collection, the pictures or whatever it might be, as a money-earning asset during his lifetime. That is what those words are designed to do, and it would not really carry the

matter very much further merely to take those words out.
The second and third of the three Clauses introduces the larger question of buildings. That is an important and difficult question. Often when these proposals are made, the argument is quite rightly adduced, and it always has been, that one of the major objectives to be attained is to prevent pictures and objects of artistic value being sent abroad and bought overseas. Of course, that consideration is peculiarly applicable in the case of things which can be sold overseas. It does not really apply in the case of buildings. [Hon. Members: "Oh!"] Well, I believe that attempts have been made to transport buildings brick by brick, but, broadly speaking, that kind of argument applies to pictures, and so on, but not to solid, fixed things like buildings.
One hon. Member raised the question whether, for example, a house like Chatsworth would be included within the scope of the Clause. It undoubtedly would. If the second new Clause were accepted it would refer to all those very large—

Mr. Leslie Hale: And to every public house where Queen Elizabeth slept. Almost half the older buildings in the country could come within the scope of the Clause once it includes houses and buildings.

Mr. Colegate: To pass from that frivolous point to one which is more serious, surely the right hon. and learned Gentleman must recognise that this is not a question of what one can claim. The whole matter is within the complete discretion of the Treasury, and from what I know of them they are not likely to include public houses.

The Solicitor-General: It would be within the discretion of the Treasury, and to enable the Treasury to act with any kind of sensible consistency it would be necessary for them to have some authority to which to refer to obtain advice on these matters.
My hon. Friend the Member for Oldham, West (Mr. Leslie Hale) asks about public
houses which have historic associations. He was not saying that flippantly; I am quite sure that he meant


it. The question would arise in connection with public houses which have historic associations. Many houses in London now have great artistic value and beauty and one must have some kind of organisation set up in order for some kind of consistency to be introduced into the matter. After all, to exempt them all from Death Duties would mean an enormous sum of money in due course. To accept this proposal—I do not say this at all offensively—in the very bare form in which it is put forward is, I would suggest, entirely premature.
Therefore, I hope the Committee will agree that the right attitude to adopt towards the proposals which are made in the new Clauses is to say that they should stand over and that we should first have an opportunity of considering the implications of the Gowers Report so that we can work out, if possible, in the light of what they say, some kind of coherent, sensible scheme if it appears desirable in the light of their report.
6.45 p.m.
I would only add this. It is not right to think that we have not already done a great deal in that respect. Obviously, it is desirable to prevent buildings of value being destroyed or dismantled in one way or another. Our existing legislation, besides the enactment to which attention has already been called, contains a considerable measure of protection. I would remind hon. Members of the provisions regarding houses which are given to the National Trust under the 1931 Act; and in the Finance Act of last year we went further and extended the exemption to maintenance funds which were made available for the preservation of houses of that kind.
Furthermore, there is the legislation
which enables the Ministry of Works to concern itself with scheduled ancient monuments. That is contained in Section 40 of the 1931 Finance Act. From a rather different angle, in the Finance Act, 1946, we established the National Land Fund, which, also, will to some extent assist in the preservation as buildings of these historic houses, and so on. I hope the Committee will agree that it would be premature now, and indeed impossible, having regard to the problems I have indicated which would first have to be solved, to accept the proposals contained in the new Clauses.

Mr. Keeling: I only rise to ask one question and to make one remark. I ask the question first in the hope that if the Solicitor-General has not the answer with him, perhaps he would be so kind as to obtain it while I am making the remark.
The question is, can the right hon. and learned Gentleman confirm that the report of the Gowers Committee will be published on Friday? The remark is this. Both my hon. Friend the Member for Windsor (Mr. Mott-Radclyffe) and the Solicitor-General referred to the National Trust. Although houses and other buildings which are
left to the National Trust are exempt from Death Duties provided that they are forthwith declared inalienable by the National Trust that is not true of chattels. Furniture, pictures, tapestries and other chattels which are left to the
National Trust are not as such exempt from Death Duties. Can the Solicitor-General answer my question?

The Solicitor-General: It is hoped to publish the report on the 23rd of this month, which is Friday. With regard to chattels, they are, of course, within the protection already given by Section 40 of the 1930 Act. The houses which are vested in the National Trust obtain the exemption which goes with them; and chattels, the other side of the question to which the hon. Member refers, are covered by Section 40 of the 1930 Act, to which we have just been referring.

Mr. Keeling: I might add that National Trust chattels do not yield any income.

Mr. Colegate: I had hoped for a rather more sympathetic reception towards the new Clauses, and I feel that a little more imagination might have been used by the right hon. and learned Gentleman. It is very difficult to resist the persuasiveness of the Solicitor-General, but it proved a little too much when, after telling the Committee that one of the greatest difficulties would be in trying to distinguish which buildings should be preserved and rejecting my suggestion of inviting the assistance of somebody from one of the museums, he went on to say that they were doing this kind of thing every day of the week and that use is made of the Ministry of


Works, who select the ancient monuments
to preserve and the National Trust. The Ministry, however, are constantly in the habit of discriminating between the ancient monuments which may be offered to them. One cannot simply go to the National Trust or to the Ministry of Works and plant upon them any ancient monument or artistic house one likes.
The Solicitor-General talked as though there were no discrimination. Of course, there is a great deal of discrimination, and I have no doubt, from the great deal which I had at one time to do with the Office of Works, that they would be delighted to be charged with the task in question.

Sir S. Cripps: Sir S. Cripps indicated dissent.

Mr. Colegate: Perhaps not under the present Minister, but there have been Ministers who took a great interest in these matters. I was rather surprised that the right hon. and learned Gentleman rode rather loosely over one of the very things set out in Clause 38, that one of the conditions is that reasonable steps should be taken for preservation. There is no question that if the scope of the Clause is enlarged it would be possible to go beyond that. However, in the hope that when the report comes out it might touch the imagination of hon. Members and that we might have some protection really worthy of this nation and this magnificent collection of historic objects, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

Lieut.-Commander Braithwaite: On a point of order. Do I understand that the new Clause [Exemption from Entertainments Duty of Amateur Entertainments], on which I understand a great many Members have had a great deal of correspondence and which is in the name of my hon. Friend the Member for Twickenham (Mr. Keeling), has not been selected?

The Deputy-Chairman: No, it has not been selected.

New Clause.—(EXEMPTION FROM INCOME TAX OF SERVICE ALLOWANCES.)

(1) Any allowance payable out of the public revenue to or in respect of any class of persons

being either members of the armed forces of the Crown or women serving in any of the capacities mentioned in the Sixth Schedule to the Finance Act, 1946, shall not be regarded as income for any of the purposes of the Income Tax Acts.
(2) This section shall have effect from the beginning of the year 1950–51.—[Mr. Low.]

Brought up, and read the First time.

Mr. A. R. W. Low: I beg to move, "That the Clause be read a Second time."
These allowances differ, of course, from pay and that is why they are called allowances. They are given in general to cover expenses, or in substitution of provisions made in kind for other members of the Armed Forces. For example, many members of the Armed Forces live in barracks or accommodation for which they do not have to pay. Some allowances are given in substitution of that accommodation, and my reason for raising this now is to try to ensure that officers and men who are in receipt of Service allowances are really given the proper allowance for the expense or the provision in kind which the allowance is meant to cover.
I do not think that this proposed Clause will be resisted by the Government
on the grounds of its cost. I express that opinion for two reasons. First, I asked the Financial Secretary to the Treasury what it would cost and he was unable to reply; he said it had not been worked out. Secondly, I express that opinion for the reason that, even if the Government accept this new Clause, they have it in their power to alter allowances in such a way that there would be no extra cost on the Exchequer. We would think it rather bad treatment if the Government did that, but the question of the cost on the Exchequer is not raised right in the forefront.
But the Clause raises at once a Treasury principle, a principle of taxation on which I imagine most of the Debate will run. It also raises, as any Debate on Service pay and allowances must raise, the wider question of the difficulties that serving officers and men are in today. But it is, of course, on the taxation principle that I expect we shall hear most of the Debate and it is on that that I want to concentrate my remarks.
I tell the Committee at once that I am conscious of my inadequacy to put the


points as well as they might be put because this is a matter of Income Tax law and principle to a great extent. But, I think the Chancellor will probably be able to read between the somewhat halting points I put to him what is worrying me and my hon. and gallant Friends. This is no strange doctrine to the Armed Forces. The White Papers on pay and allowances issued in 1946, particularly the one in connection with post-war pay for commissioned officers—Command Paper 6750—had paragraphs dealing with the previous taxation position. I will quote from that:
During the war … and to a considerable extent before the war, pending a review of the taxation position of all allowances paid to members of the forces, marriage allowances, lodging allowances, family allowances and allowances in respect of children have in general not been taxed.
The change was made when there was that review which was anticipated throughout the war and it was announced in these two White Papers. I do not think that at the time the announcement was made everybody in the House and, I venture to say, everybody in the Government, appreciated the great changes which would be made. The arguments for the change were also put in the White Paper. They said:
It is anomalous that an appreciable proportion of the emoluments of Service personnel should, contrary to normal practice, be free from tax. To this extent, Service personnel did not share in the gains or losses due to the decreases or increases in Income Tax which affect the rest of the community,
While, of course, that may be argued, service personnel also did not share in the gains of earnings which have been given to the rest of the community, and as I shall argue in the course of my speech, it is really impossible to consider Service pay and allowances as a whole in exactly the same way as we consider the emoluments of civilians. As we have often argued, they certainly bear relation in total to civilian earnings but it is impossible to apply exactly the same principles. I give this as my first reason—one has only to look at the history of these allowances.
What, for example, we call now marriage allowances for officers were, before the war, marriage rates of lodging allowance and furniture allowance and other allowances which were given to officers as substitution of furniture in

kind, of lodging in kind and of fuel and light in kind. They were allowances given in substitution of provision made in kind for other members of the Forces. That was the origin of these allowances on which I particularly want to concentrate. It is even easier to see when we are not dealing with the married officers' allowances, but with lodging allowance now given to single officers. That allowance was given to the single officer which could not be accommodated at public expense in public quarters without charge and without provision of furniture in kind and without provision of fuel and light in kind. I wish to emphasise that if hon. Members will look at the history they will see that these allowances are really given in substitution of provisions made in kind.
7.0 p.m.
There are people who consider that the marriage allowance, for example, enjoyed by an officer or other rank is really part of his general emoluments. If that is so, all I have to say is that the single men are paid very badly indeed as we understand the meaning of the word. The marriage allowance and lodging allowance are given to the officer or man for some definite reason in substitution for something which his colleagues otherwise enjoy in kind. In the Debate the other night on the National Fire Service allowances, to which I shall shortly refer, the matter was very well put by one of my hon. Friends when he said that in cases such as this, when payments were made in lieu of provisions in kind, those provisions should be made free of tax.
A moment or two ago I referred to the fact that in 1946 there was this change from the position whereby these allowances were free of tax to the position that marriage allowance and lodging allowance were treated as part of the emoluments and were made subject to tax. This has caused, as I think the Committee is aware, real hardship and resentment in the minds of many people. It has caused hardship because the result of imposing taxation on these allowances has in many cases been to reduce the amount actually enjoyed by the officer for the purpose covered by those allowances. It has caused resentment because the whole atmosphere that surrounded the issue of these White Papers on pay was one of improvement in rates of pay.
It has also caused resentment because when the Government brought in this new rule that these allowances should be made subject to tax they expressly provided that it should not come into force for a year. They did that because they knew that hardship would be caused. Another point of importance which has followed from that decision to delay the bringing into force of this provision for a year is that as a result we in this House did not at that time receive the full impact of opinion in the Forces on the change that had been made. The change was announced and there was a gap of a year and a half before its effects were felt. I say that to explain that, although we have on other occasions discussed this point, it has not previously been debated in this House as a major point since 1946. That delay had its effect in the informing of public opinion and the opinion of Members of this Committee.
I have said that in many cases the result of imposing taxation on these allowances had caused officers in particular to receive less for their lodging or other purposes covered by the old marriage rates and lodging allowances. I wish now to give the Committee some examples of the effect. Before the 1946 code came into operation a married major received £234 per year tax free by way of marriage rates and lodging allowance. Under the present system he received £338, which, after tax deduction, is reduced to £216, which is less than he previously had. A captain likewise now receives £338, which in his case is reduced only to £227 in comparison with the £232 which he previously received. A colonel received £245 net in comparison with £283 under the original pay code.
I should like to make another comparison. As the result of the imposition of taxation on marriage allowances in particular we get the extraordinary result that of an allowance which is expressly given, according to the allowances regulations, to enable a man to meet his current family obligations, less is drawn net by a senior officer than is drawn by a junior officer. That seems to me to be quite illogical. If an allowance is given for a particular purpose one would imagine that a major had as much need in that respect as a young subaltern but the major now receives only £216 net a

year whereas the subaltern receives £250 a year. I am not quarrelling with the fact that the subaltern receives £250 a year; I am quarrelling with the extraordinary fact that a major receives £34 less. A lieutenant-general whom one might have thought would also have family commitments receives £189 10s; net. That is a most extraordinary result which is brought about because taxation has been applied to allowances which were designed not simply to meet expenses as we understand them but to substitute for provisions in kind.
It is no use saying that in other
branches of our life pay does not include provision in kind. In the Forces it does. It is largely for that reason that one has to treat the Forces as a special case. The Government have shown a willingness to treat the Forces as a special case from the point of view of their ration allowance. The Government have acknowledged that the ration allowances given in lieu of rations should not be taxed. That is covered in Section 30 of the Finance Act, 1946. That acknowledges that there is a special case. I plead with the Chancellor that the whole of this position should be considered as a special case.

Mr. George Wigg: Will the hon. Member tell us what items he has included in working out his net sums? Are they only fuel, light and lodging allowances?

Mr. Low: Nowadays these allowances are all consolidated. I imagine the hon. Member is referring to the old position. I have included fuel and light and lodging allowances.

Mr. Wigg: Not furniture allowances?

Mr. Low: No. In certain instances furniture allowance is still payable so the comparison would have been false had that been included.
I hope that the Committee will forgive me for trying to make a broad survey on this matter. Before I pass on to another point I would say that in this matter it is the officers who have suffered most but the other ranks suffer as well. It is easier, however, to take one's examples from the officer level. I have taken them bearing in mind also, as I hope the Committee will bear in mind, that although there may not be as many officers as men, a unit with bad officers must be a bad unit,


whereas a unit with good officers can never be a bad unit. I have in my remarks been referring mainly to the Army, but as the Chancellor will see, my hon. and gallant Friends who are supporting me in bringing forward this new Clause speak in this House for all three Services. Although it is right for me to take the Army as an example, I know they will follow me by giving examples, if necessary, from their own Services.
Before I conclude I wish to remind the Chancellor that when this post-war Pay Code was introduced certain assumptions must have been made about the rate of Income Tax. We have discussed this matter from time to time in Service Debates, but I think there is no better proof of the remark I have just made than an extract from the speech made by the right hon. Member for Bassetlaw (Mr. Bellenger) who was in 1947 Secretary of State for War. On 30th July, 1947, in defending the position of Service pay and allowances he said:
However, the Committee has reason to hope that taxation will be reduced, and I know that is the intention of my right hon. Friend the Chancellor of the Exchequer to achieve that"—
Then my right hon. Friend the Member for Bristol, West (Mr. Stanley) interjected, "Oh". The right hon. Member for Bassetlaw went on:
The right hon. Gentleman may be cynical "—
and my right hon. Friend the Member for Bristol, West said, "Sceptical." The right hon. Member for Bassetlaw went on:
He is cynical sometimes too—sceptical of the remarks of my right hon. Friend the Chancellor of the Exchequer."—(OFFICIAL REPORT, 30th July, 1947; Vol. 441, c. 517.]
now the Chancellor of the Duchy of Lancaster—[HON. MEMBERS: "No, Minister of Town and Country Planning."]—I beg the pardon of the right hon. Gentleman, he has been promoted. But what does all that mean? It does show that in the mind of the then Secretary of State for War the rate of taxation has certainly operated, particularly when he considered this question of allowances and pay. It is quite wrong that allowances given for specific purposes should be reduced in value—or increased in value, if the Committee like to put it that way—by the rate of taxation running at a given moment.
It would be wrong just to leave the argument there. There are other cases in Government service where tax-free payments, or payments which have the effect of making the original payment tax-free, are made to Government servants. One of those we debated the other night, the National Fire Service. In that instance Regulations were approved enabling the Secretary of State for Home Affairs to make compensatory payments so as to cover all taxation paid on rent allowances by certain officers in the National Fire Service. It was argued that that complicated way of doing it was necessary, otherwise, so the Under-Secretary for Home Affairs told us, it would not be fair between man and man, owing to the differing tax liabilities. That of course, as my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) pointed out, was a very good argument in support of the Clause which I am moving today.
I believe it is also the practice in the Police Force to give tax-free allowances to cover the cost of accommodation; so much is it the practice that I believe the police are advertising for men and saying that a tax-free allowance is being given. But let me come nearer home. It is also the practice in the Civil Service to give tax-free allowances to civil servants who move their station. Many of these—

Mr. Douglas Houghton: If the hon. Member is referring to transfer grants in the case of established civil servants, they are taxable.

Mr. Low: I understand that there is a complicated system of allowances given to civil servants transferred from place to place most of which—I am subject to correction—are free of tax. I can only say that on the authority of something said in this House which we cross-questioned to see—

Mr. Houghton: Mr. Houghton rose—

Mr. Low: I know that the hon. Member is an expert, but I think he must let me state my case as I understand it to be. In any case, I know that when a civil servant has to find accommodation at a new station, for three months I think it is, he is given a lodging allowance to help pay for accommodation until his family join him, and that lodging allowance is free of tax. If a serving officer moves his


station and is given a lodging allowance in addition to his marriage allowance until his family join him, that lodging allowance is not free of tax; so that there is a discrepancy there. I stand by my facts; I have looked them up as well as an amateur can look them up.
It may well be stated by the Chancellor, "All you are out to do is to get more pay for the Forces." Certainly I am out to do that. Certainly there are other ways of doing that besides getting this Clause accepted by the Government. Certainly it is true of this Clause that if it were accepted it would impose no burden on the Defence Estimates; the burden would lie somewhere else, and in fact the Defence Estimates might be reduced, but I do not think we should deal with such petty points. We are out to consider these people, and I hope we shall also consider the fact that sooner or later the Government must come to the view that they are not giving sufficient net allowances to members of the Forces, both officers and other ranks, to enable proper Regular Forces to be kept up.
Many of us on this side of the Committee, who have advocated that steps should be taken to improve this position, have always said that in our opinion if this is done ultimately—and after not a very long interval—the Government will be able to save money and save the numbers of men in the Forces. Therefore I do not think that on this occasion any question of over-burdening the Exchequer can arise in contradiction to the arguments which I have put forward.

7.15 p.m.

Mr. Emrys Hughes: I always listen with an open mind to speeches from ex-Service personnel on the other side of the Committee, always realising that they now represent what is the most powerful trade union in this House.

Mr. Boothby: The intelligentsia!

Mr. Hughes: I think we should examine the facts and figures on their merits, and also with regard to other members of the community, because it would be quite possible for any other trade union to put forward just as reasonable a case for the exemption of

their allowances from taxation. I can quite understand that the butchers, for example, could put up quite as reasonable a case as the Service members.

Brigadier Clarke: Will the hon. Member admit that the Army, Navy, and Air Force have no trade union and that we are the only people who can speak for them? The trade unions can speak for themselves?

Mr. Hughes: All I can say is that if they have no official trade union they have a very efficient substitute for it in this House. We hear the point of view of that, shall I call it "unofficial organisation" on every possible occasion in this House. Indeed, the hon. and gallant Member for Portsmouth, West (Brigadier Clarke) nearly made me take a collection for the brigadiers on the last occasion he addressed this House, which was on the occasion of an Adjournment Debate—

Brigadier Clarke: What stopped you?

Mr. Hughes: We must not be sentimental about these things, and I therefore invite the Committee to look in rather greater detail at the propositions we are now expected to endorse. We are expected to take it for granted that Army, Navy and Air Force officers are so badly treated that they deserve special concessions which should be cheerfully contributed to by less fortunate members of the community. I could put up quite as good a case, if not a better case, for the exemption from Income Tax of miners. Let us examine some of the figures which have been given us in the Army Estimates, to see whether there are any compassionate grounds for accepting the principle of this proposed new Clause. Let us start at the lower end of the scale. The second-lieutenant has 13s. a day, ration allowance of 3s. 4d. a day, lodging allowance of 11s. a day, and a marriage allowance of 18s. 6d. a day. All these figures are from the Army Estimates, according to which—

Mr. Low: The hon. Gentleman should not mislead the Committee by aggregating those figures.

Mr. Hughes: I have taken them from the Army Estimates.

Brigadier Head: The hon. Gentleman has misread them.

Mr. Hughes: No, I have not; I have looked at them very carefully. According to this table of statistics, a single second-lieutenant gets £499 a year and a married second-lieutenant gets £636 a year—£12 a week. The great majority of the taxpayers, the wage earners, are not getting £12 a week, and see no logical reason why special consideration should be given to one particular uniformed class. After three years a married second-lieutenant gets £14 6s. a week, which is a very good income compared with the low-paid railwaymen, or even with the low-paid men working in the mines.

General Sir George Jeffreys: The hon. Gentleman says that after three years a married second-lieutenant gets £14 6s. a week. What is argued by the Government is, not that he gets £14 6s. a week but that he gets £14 6s. worth a week: he does not draw all that in cash. His lodging is estimated at so much a week; he does not get the cash. The only thing that can be said is that he does not have to pay anything for his lodging. Actually, his lodging may very likely be the cold, bare ground, as I can assure the hon. Gentleman was the case with myself for many months when I was a young officer.

Mr. Hughes: I can quite understand the point of view of the hon. and gallant Gentleman, but it is not reasonable to ask us to accept the theory that today the second-lieutenant is sleeping on the cold, bare ground.

Sir G. Jeffreys: He was in war-time.

Mr. Charles Ian Orr-Ewing: What allowance has the hon. Gentleman allowed, in his own mind, for the fact that those in the Services may be posted to Malaya or elsewhere abroad? Now that the party opposite have accepted our policy, and abolished the direction of labour, that sort of thing cannot happen to the miners of whom the hon. Gentleman is speaking, or others in the same category.

Mr. Hughes: The miner cannot, of course, be sent to Malaya, but the miner suffers a good many inconveniences and discomforts which the normal Army officer does not. If the hon. Gentleman would care to come to my constituency I can show him miners living three in a room who have to share their beds, some

going on the night shift and others on the day shift. If we are to be sentimental about it, I can put up quite as good a case for lodging allowances for miners as hon. and gallant Gentlemen opposite can put up for lodging allowances for officers. The miners and those who represent the miners must be convinced that this is a reasonable concession that is being asked for. Given the whole picture I do not think it can be argued that we are entitled to give the Army officer special treatment in the way of allowances.
I have quoted the case of the second-lieutenant, but as we go higher in the scale the anomaly gets worse. An unmarried major after six years, gets £1,010 a year, or £20 a week. I submit that the £20 a week major ought to be prepared to face the Income Tax collector just as other people do. I fail to see why hon. and gallant Gentlemen who can face the foe without a tremor are so shocked at the prospect of meeting the Income Tax collector. The married major gets £22 a week. We go up the hierarchy and come to the colonel, and then to the brigadier—

Mr. Hollis: I presume, on his argument, that the hon. Gentleman claims no allowance on his own Income Tax. Is that so?

Mr. Hughes: I am not discussing theory. I am discussing the hard facts of the reasonable income paid to Army officers, and I do not think we can accept the assertion that they are so harshly treated as to deserve exceptional treatment from the Chancellor of the Exchequer. That is the general proposition, and I now want to illustrate it by taking the case of the brigadier.

Mr. Hugh Fraser: Would the hon. Gentleman tell us about the Coal Board?

Mr. Hughes: I do not see why the hon. Gentleman should get so excited. I am just reducing the matter to the facts which should be available to the ordinary person who is asked to support the principle of this proposed new Clause. Now, the brigadier gets £3 17s. a day—

Sir William Darling: How much of that is allowance and how much is in pay?

Mr. Hughes: —3s. 4d. a day ration allowance, 17s. a day lodging allowance,


and £1 3s. 6d. a day marriage allowance. A single brigadier gets £1,776 a year, or £34 a week, and the married brigadier gets £36 a week. I submit to my hard-headed friend from Edinburgh that he cannot go to an Edinburgh audience, even an audience composed of Edinburgh Tories, and justify his action in supporting this proposed new Clause, in view of the average wage of the lower paid citizens of Edinburgh.

Sir W. Darling: The hon. Gentleman is quite mistaken. I should have no difficulty in facing such an audience. What the hon. Gentleman does not understand is the difference between income and allowances.

Mr. Nabarro: What about housing in Scotland?

Mr. Hughes: If the hon. Gentleman represented a Scottish constituency he would not be so facetious about housing. In passing, I would just point out to him that any Member for a Scottish constituency who does not on every possible occasion draw attention to housing is neglecting the duty he was sent to this House to perform.
Let us now take the general. The general gets £8 a day. I will not go into the question what kind of general—

Colonel Gomme-Duncan: There are three grades of general: generals, lieut.-generals and major-generals, all on different rates of pay and allowances.

Mr. Hughes: I am well aware of the different grades of general, but what I can reasonably argue is that generals should be paid by results, when these figures might not look quite so unreasonable.

7.30 p.m.

Mr. Braine: Would the hon. Gentleman extend that principle to Ministers of the Crown?

Mr. Hughes: Yes, to Ministers of all parties.
The reason why we have these interruptions is because the facts which I have given are upsetting the case put by hon. and gallant Gentlemen opposite. The general gets £8 per day, and I am quite sure that my right hon. Friend the Member for Dunbarton, East (Mr. Kirkwood)

could not justify voting for this new Clause before a meeting of engineers in Dumbarton.

Mr. Kirkwood: I could not.

Mr. Hughes: The general receives 3s. 4d. a day ration allowance, £1 a day lodging allowance and £1 6s. a day marriage allowance. The unmarried general receives £3,346 a year, or £64 a week, and the married general gets £70 a week. I will conclude with the case of the field marshal, having gone right up the scale. The field marshal receives £9 a day, 3s. 4d. a day ration allowance, £1 a day lodging allowance and £1 6s. a day marriage allowance. A single field marshal receives £70 a week and a married field marshal £71 per week.
With these facts before us, we are asked to accept the principle that we should dole out relief in taxation to people who, compared with the civilian population, are reasonably well paid. I ask the Chancellor of the Exchequer to take the point of view of the great majority of the citizens, and not yield to the demands of those in this House who speak for a small, privileged section of the community.

Brigadier Head: I am extremely glad to be called at this time because of what I consider to be a serious subject, and on which I have never heard a more drivelling speech than that just delivered by the hon. Member for South Ayrshire (Mr. Emrys Hughes). If the hon. Member thinks that he does himself any credit, or that he does any credit to the Committee by delivering such a speech, I am entirely in disagreement with him. We are discussing here a case of extremely hardship to all three Services, who kept the hon. Gentleman safe and enabled him to be here today. I am fed up with his drivelling about this matter; my patience is exhausted.
I want to turn to this matter of allowances and say that the subject we are discussing concerns one point alone, and that is that, at present, if we want to have a good standard of officers in the Services, we shall have to improve their conditions. They are living in conditions of great financial difficulty, quite unable to keep up the status which is expected of them in their position. The same


thing is happening in this country as always happens in peace-time, when we get undue control by the Treasury and there is no vote for giving money to these people, with the result that the Treasury give them very little. By this action we are not only making their own lives more difficult, but we are making it much more likely that there will be another war.
I say to the Chancellor of the Exchequer, who is always busy talking when a point is made against him, that he is being
forced into this position by the Minister of Defence. This matter of allowances rankles more than anything among officers because it has been nothing more or less than a swindle. The Treasury said that they would put up Service allowances, but the officers concerned found that, when the new rate of Income Tax was introduced, they were reduced again. That was the worst piece of economy in which the Treasury have ever indulged, because it resulted in innumerable good officers leaving the Service, while those who remained were much embittered by the action of the Treasury. The Chancellor has still got a great deal of good will in the Services. Members get up on the benches opposite and talk about how well we are doing in Malaya and the wonderful performances of the troops. Why should we not consider the future of the officers and the senior noncommissioned officers?
I will tell the Chancellor one more thing. Within six or nine months, he will be forced by outside pressure to put up the pay of these men. He has lost a great deal of the good will of the Services and there is now a great wastage. If the Secretary of State for War had the guts to say so, he would say that the wastage of officers and N.C.Os. in the Forces today was so great that it was causing the very gravest concern to himself, to the Chief of the Imperial General Staff, to the First Sea Lord and to many others. They keep silent. Why? They want to try to retrieve the ragged political reputation of the Government because of the change made by the Chancellor of the Exchequer.
The right hon. and learned Gentleman would do well to be very careful about this matter. I know that two other Chancellors have done this, with the result that many of our people have been

slaughtered unnecessarily because of the restriction on money to keep our Forces in a state of adequate preparation.

Mr. Wigg: I trust that I shall be able to speak with a little less heat than the hon. and gallant Member for Carshalton (Brigadier Head). I think his speech was very unfair to hon. Members on this side of the Committee, who, ever since 1945, have done their best to try to improve the conditions of Service. I remember having tried to respond, though not always successfully, to the plea of the noble Lord the Member for Horsham (Earl Winterton) that we should discuss these Service matters on a non-party basis.

Earl Winterton: As the hon. Gentleman has referred to me, may I say that, so far as he is concerned, I entirely agree with him, and that he is justified in what he has said, but when we have to listen to a speech such as that which has just been delivered by the hon. Gentleman below the Gangway—

Mr. S. O. Davies: Speech.

Earl Winterton: I am not making a speech; I am entitled to make an interruption, and the hon. Gentleman will find that he will not get anything out of me by shouting at me. What the hon. Member for Dudley (Mr. Wigg) said was perfectly fair, but, when we have to listen to such a disgraceful speech as that from the hon. Member below the Gangway, from a man who was out to destroy this country during the war—

Mr. Emrys Hughes: On a point of order. The noble Lord said that I tried to destroy this country.

Earl Winterton: Yes, by your speeches.

Mr. Hughes: I doubt if that is in order, but it is entirely untrue.

Earl Winterton: My reference was to the fact that throughout the last war the hon. Gentleman did all he could to impede the progress of the war effort of this country by speeches in the House.

Mr. Hughes: I was not in the House during the last war.

Mr. Wigg: I join with the noble Lord in regretting certain aspects of my hon. Friend's speech. I thought he was singularly ill-informed, but it is not wholly the fault of my hon. Friend; it was partly due to interventions from the other side, which had nothing whatever to do with this new Clause. Hon. Gentlemen opposite must learn that they cannot dish it out if they cannot take it themselves. If the hon. and gallant Gentleman opposite wants to discuss Service conditions from the First World War onwards, I am at his service, and not only here but in his constituency or in mine. I know only too well the generosity with which the Services were treated by a Conservative Government. Let us not come here and presume, pretend or suggest that a Labour Government is the epitome of meanness while the Tory Party has always been open-handed in its generosity and in its treatment of officers and N.C.Os.
There is a great illusion implicit in this Clause. The hon. Member for Blackpool, South (Mr. Low) assumed, and so did his hon. Friends who are associated with him, that allowances before the war were not taxable.

Mr. Low: I read from a Command Paper. I thought that was good enough.

Mr. Wigg: It just is not true. Lodging allowances and the other allowances for an officer at the age of 30 were only introduced in 1919 by Army Order 324. They were only granted to an officer when he attained the age of 30. Therefore, for the hon. Gentleman to come here and give a bald figure like that, without taking any account of the facts, is unfair.
Another allowance which was taxable before the war, in just the same way, was the Colonial allowance. My hon. Friend the Member for Ayrshire, South, persisted in talking about the pay and allowances of the senior ranks. In his Army, apparently, there is nobody below the rank of 2nd lieutenant—they presumably run from 2nd lieutenant up to field-marshal. What he overlooks, and what hon. Members opposite overlook, is that when an officer reaches
a certain seniority he gets a staff appointment, and, before the war, all allowances for staff appointments were taxed. Therefore, what the Treasury were trying to do—and I am not here to defend the Treasury or to suggest that they are generous in their treatment of the Services; they are not—when the new pay

code was introduced was to import a little common sense into this business.
I am not lacking in raising my voice in support of the need for generosity to the Armed Forces if we are to get the Forces we want. But it is no use hon. Members opposite coming here and trying to bully the Chancellor, or raising their voices and shouting, and suggesting that they were generous to the Forces and that we on this side were not. That is absolutely untrue. I deplored the remark of the hon. Member for Blackpool, North, who suggested that if we want a good regiment we must have good officers. Perhaps he will forgive me if I think the same regarding N.C.Os.

Mr. Nabarro: And private soldiers as well.

Mr. Wigg: It would have been better had the hon. Member for Kidderminster (Mr. Nabarro) raised his voice when the hon. Gentleman opposite spoke about officers, instead of by way of an afterthought.
I do not think there is any difference of view between the hon. Member for Blackpool, North and myself, when the Tory Party talk about Service conditions, they should first do a little bit of research to see how the Armed Forces of the Crown were treated when they were in power. [An HON. MEMBER: "What did the Labour Party do"?] The Labour Party stopped the reductions in the rates of pay.

The Temporary Chairman (Mr. Lang): The hon. Gentleman must not go back to that; he must confine himself to the Amendment.

Mr. Wigg: I am the last person, Mr. Lang, to dissent from your Ruling, but I do not want to be victimised in the same way as was my hon. Friend the Member for Ayrshire, South. He was interrupted by a number of irrelevancies, and, when he fell for them, he was charged by hon. Members opposite with making a disgraceful speech. I was interrupted and asked what the Labour Party did. I am quite prepared to tell hon. Members Opposite what they did, and also what the Tory Party did.

The Temporary Chairman: That is just what the hon. Gentleman must not do; he must not discuss either what the Labour Party or the Tory Party did.

Mr. Wigg: If, in fact, improvements in pay and conditions are to be given to the Armed Forces, they should be given by the front door and not by the back door. I do not believe that the acceptance of this Amendment would help the Forces at all. If it were accepted, the headlines in tomorrow morning's newspapers would convince the Forces that certain improvements had been made, whereas, on investigation, a considerable number of officers and N.C.O's would find that, once again, they had been caught up in a mass of regulations which they imperfectly understood. They would find that they were being given emoluments with one hand which were being taken away with the other. The pay codes introduced in 1945 and 1946 were the foundations upon which we should build. A great number of improvements could be made, and I am not going to suggest that they could be brought about in certain ways, but I am quite sure that the acceptance of this Amendment is not one of them.

7.45 p.m.

Mr. Boyd-Carpenter: I hope that before very long a right hon. Gentleman will rise from the Front Bench opposite at least to repudiate on the part of the party opposite the sneers which the hon. Member for Ayrshire, South (Mr. Emrys Hughes) thought fit to direct against men in the Services, some of whom are at this moment, as the Secretary of State for War well knows, fighting and dying for vital British interests in the jungles of Malaya. It is obvious that one of the explanations for the failure of recruiting must be the fact that speeches of that sort can be made from the benches opposite and are not instantly repudiated by the responsible Ministers.
The hon. Member for Dudley (Mr. Wigg) left us until the last minute of his speech far from clear whether he was for or against the Amendment. I do not propose to follow him, even if it would be in order, into a long controversy as to who in the past treated the Services best. The practical issue is, what are the Government going to do about it now, and what, within the rules of order, they are going to do to deal with the very real grievance concerning which my hon. Friend the Member for Blackpool, North (Mr. Low), has done a good service to

this Committee and to this country in putting forward in this new Clause.
I would say to the hon. Member for Ayrshire, South, that there is no suggestion behind this Amendment, as he stated, of special concessions to anybody. There is put forward a principle which is already applied by Government Departments in other cases, in particular the case of the Fire Brigade. When the hon. Member says that a powerful trade union is seeking to obtain special advantages of this particular kind for its members, I ask him to argue that out with the Fire Brigade's union which succeeded in convincing the Home Secretary of the desirability of granting in substance, a precisely similar concession to senior officers of the Fire Brigade. The principle accepted down to 1946 was, as right hon. Gentlemen Opposite know, that where somebody receives either a payment in kind, which is anyhow tax free, or where he cannot get that payment in kind, the alternative allowances, those allowances should be tax free. That is all.
The excursions of the hon. Member for Ayrshire, South, into the realms of tax avoidance show that he did not succeed in grasping that point. The point in its simplest form is this. In many cases, the exigencies of the Service dictate that a man gets a benefit in kind which is tax free, but where, because he cannot get it in kind, he gets it in cash, the Chancellor helps himself to a very large proportion of it. That is the principle at issue, and it is precisely the principle to which, as my hon. Friend pointed out, the Home Secretary applied his mind in the earlier months of this year when he had precisely this problem to face in dealing with certain senior and responsible officers of the Fire Brigade.
Although he did not give them tax immunity—no doubt because of certain technical difficulties to be found not very far from Great George Street—he gave them the substance of tax free allowances by an ingenious and somewhat complicated method of, first of all, paying them allowances, allowing those allowances to be subjected to tax, then paying them a compensatory allowance to cover the tax on the original allowance, and, when that compensatory allowance was subjected to tax, the right hon. Gentleman paid them a further compensatory allowance to make up for that tax, an ingenious


expedient, the substance of which is to make these allowances, for the reasons I have given, tax free.
If hon. Gentlemen opposite want a statement of these reasons made from that Box within the last few weeks, perhaps they would allow me to read to them the admirably lucid exposition of the same doctrine that this Amendment puts forward by the Under-Secretary of State for the Home Department. He said:
Before these Regulations, the men in the Fire Service used to get not only their pay—that is, basic and pensionable pay—but either free quarters or rent allowance. Under the Income Tax law, a man occupying free quarters 'as a necessary consequence of his employment'—I stress that, because it is not only the essence of the Income Tax law on this point, but also overwhelmingly important in regard to firemen—does not pay Income Tax on the value of those quarters. The man who received rent allowance instead did pay Income Tax on that rent allowance. I stress again that in the case of firemen, this 'necessary consequence of their employment,' is a factor of the greatest importance.
To make it fairer, therefore, those who got rent allowance were given this extra compensatory grant to cover the Income Tax they paid."—[OFFICIAL REPORT, 23rd May, 1950; Vol. 475, c. 1802–3.]
That is exactly the point at issue here.
Therefore, with great respect to the right hon. Gentlemen opposite, it would be no use their getting up and saying that to accept this Amendment will be to violate principles of tax law. If there be any force in that statement, that violation has already been effected by no less a person than the Secretary of State for the Home Department and Deputy-Leader of the House of Commons. We shall be forced to the conclusion that if this Amendment is not accepted and the same benefit given in the same circumstances to the Services as were given, in my view very properly, to the firemen, we shall be forced to the conclusion that the reason is to be found in the different weight carried in the counsels of His Majesty's Government by the Home Secretary and the Minister of Defence.

Earl Winterton: I appreciated the reference the hon. Member for Dudley (Mr. Wigg) was good enough to make to my hon. Friend and myself. It is quite true that we have endeavoured to keep these matters out of party controversy. My hon. Friends who have their names

to this Amendment, and myself, have been pressing this matter of improved pay for a very long time.
It would be obviously out of order for me, or indeed for any of us, to go into the history of the matter. What I think are relevant and appropriate to this Clause are these facts, which I would most earnestly commend to the notice of the Chancellor of the Exchequer. I very much hope that they will be reinforced privately in conversation by the Secretary of State for War who,
most appropriately, is sitting next to the Chancellor at the moment. I cannot but believe that the argument that I am about to address to the Committee through you, Mr. Lang will, at any rate, evoke an echo in the heart of the Secretary of State for War.
The arguments which we used in the past for an improvement in pay was that so far as is possible, pay and allowance should not be an undue bar, such as they are at the present time, to getting a sufficiency of officers or men for the Army, with the consequence that it will be necessary to keep on conscription for all time. I think that that practical argument can be backed by what might be called the sentimental argument that it is right and proper that men who are prepared to sacrifice their lives in the service of their country should be given every possible advantage that can be given under our existing system. No one would disagree with that.
This is my short point, which I would put to the Chancellor of the Exchequer with the most earnest and genuine appeal to him: everyone of my hon. and gallant Friends on this side of the House, most of whom have had more recent experience of the Service than I have, will agree with me in saying that under present taxation the advantages gained to the Services by recent accretions of pay have been largely lost. In fact, it goes further than that. I have met officers, n.c.os. and warrant officers who have said to me—it is their own language not mine—"It is the ordinary dirty game of politicians. They announce, for the purpose of getting support, that there is to be a rise in pay and then they take it away with taxation, which makes the rise of no value at all."
I shall press this on a Tory Government when we are in power, when I hope my


right hon. and gallant Friend the Member for Gainsborough (Captain Crook-shank) will be Chancellor of the Exchequer, and I, in support behind him, will press this upon him. I have sometimes divided the House on financial matters with a Conservative Government in power, and I shall be prepared to do so in future. I most earnestly beg the Chancellor, before he replies, to have regard to the points I have put—that at present he is taking away with one hand what has been given with the other in the shape of improved pay and conditions. Until that state of affairs is improved we shall never get an improved recruitment to the Armed Forces.

Sir S. Cripps: We have had a very interesting discussion, and I am sure hon. Members in all parts of the Committee will, as they always do, feel very great sympathy with serving officers and men in all the conditions of their service which I am sure all of us, including my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), would be most anxious to make as good as possible.

Air-Commodore Harvey: On a point of order. I am sorry to interrupt, but with the greatest respect, Mr. Lang, we have listened to six speeches and one other. The six speeches represented the point of view of the Army, and, while this does affect all three Services, it affects them in different ways, and I submit that the Royal Air Force should have its views represented.

The Temporary Chairman: That is not a point of order. The Chancellor of the Exchequer is now answering. It may be open to the hon. and gallant Gentleman to put his point of view subsequently.

Sir S. Cripps: I am very anxious not to cut anybody out, but so many hon. Gentlemen have asked for some indication of our point of view that I thought it was only courtesy to the Committee that I should give it to them.
I think it is right to say that we are not here discussing, nor could we discuss on this new Clause, the question of the remuneration of the Forces. That is a much broader and wider question. What we are debating is whether it is right or wrong to levy Income Tax upon certain allowances which are paid to members of the Forces. That really is a

comparatively narrow point. I do not desire anything I say, as regards this, to indicate either a lack of sympathy or an acceptance of a point of view that they should or should not have greater remuneration. What I want to deal with is the question as to whether this is the right way to do it, if anything is to be done, or whether some other or more regular method should be adopted.
It has been suggested that, as a matter of principle, where an allowance has taken the place of a provision in kind that, therefore, automatically it should be free of tax. That, of course would be quite untenable, because a large part of many people's incomes today represents what was originally a contribution in kind. For instance, take the parson who gets tithes which used always to be paid in the form of corn, or whatever the land yielded. It has been replaced now by money. One does not say that because if has been replaced by money it is not part of his income. It is a common factor in a developing civilisation that at one period provision is made in kind and, at another period, by payment of sums of money.
Take the marriage allowance of officers—I do not think that was ever provided in kind. The children's allowance for officers was never provided in kind. Some of these payments were replacing payments in kind, some were contributions in the form of cash.

Brigadier Head: The point is that quite apart from being in kind, marriage allowance was tax free. Then a beneficent Treasury said, "See how nice we are to the Services; we shall put up the marriage allowance." Everybody said, "Good"; then, after a short calculation with a pencil, they found that the new marriage allowance was less than what they had been complaining about.

8.0 p.m.

Sir S. Cripps: I can only deal with one argument at a time.

Brigadier Head: Why not deal with mine?

Sir S. Cripps: Because the hon. Member for Blackpool, North (Mr. Low) spoke before the hon. and gallant Member for Carshalton (Brigadier Head), and I am dealing first with the argument of the hon. Member for Blackpool, North.

Brigadier Head: Could not the Chancellor deal with my point?

Sir S. Cripps: The hon. and gallant Member must not be too selfish.

Brigadier Head: I do not wish to deprive the right hon. and learned Gentleman of his opportunity of replying.

Sir S. Cripps: I propose to deal with the argument of the hon. and gallant Member, but at the moment I wish to confine my remarks to what was said by the hon. Member for Blackpool, North. I am pointing out that there cannot be any principle by which Income Tax does not attach to a payment which originally was represented by provision in kind.

Sir G. Jeffreys: Is it not a fact that tithes at all times were the parson's income, and that they were an entirely different thing from an allowance given to the parson with which to find himself a rectory or a house? What we are criticising is the taxation of an allowance given for a specific purpose.

Sir S. Cripps: The allowances for a specific purpose become part of the income.

Sir G. Jeffreys: No.

Sir S. Cripps: I am sorry, but it is the fact. Take the allowances which were made at one time to many employees who used to live in and who now, instead of living in, live out and get paid a wage instead of what used to be provided for them and which the Truck Acts were passed to stop. That has been converted now into part of the wage. Nobody argues that, therefore, that part of the wage cannot attract taxation. It would be a fantastic argument. What we are dealing with here is part of the income, and it relates to the question as to whether a man is married or not. He has a different income if he is married and a different one if he is single. I put aside the argument that there is a principle by which these sort of allowances cannot be taxed.
The next point is whether these allowances ought to be taxed, which is quite another question altogether, and that is the question which the hon. and gallant Member for Carshalton was raising. Let me deal with that.

Originally, a great many of these allowances were not taxed but some of them were. I think that some of the naval allowances, such as the naval marriage allowance—I am not quite sure—were taxed. Some of them, at least, were taxed even before the last war. Attempts were made to bring some sort of order into this rather chaotic situation by which some allowances were taxed and others were not taxed, and things were uneven as between the different Services.
When it was decided, as it was decided immediately after the war, to go into the whole question of the basis of remuneration in the Services, it was then thought desirable and necessary to regulate this question as regards taxation. The way in which it was regulated was that as regards eight different kinds of allowance, three were subjected to taxation and five were not. That was explained at length in the White Paper, and the reason that was stated was that it was undesirable for a considerable proportion of the officers' or other ranks' income to be free of taxation when civilians had the whole of their income subject to taxation. It made too great an inequality in conditions between the two.
This has no relation to whether one or the other were getting enough, or more than enough, or less than enough, to live on. This was a question of bringing about inequality between the burden, whatever it was, that had to be imposed by the State as between different classes of people in the State. That led to the results, which have been stated perfectly fairly, that the marriage allowance, the composite lodging allowance and certain miscellaneous additions like tropical allowance and things of that sort, were subject to taxation, whereas the other allowances, such as ration and leave allowances, and so on, and many more, were not subjected to taxation.

Earl Winterton: Will the right hon. and learned Gentleman deal with this point? The result was that when these increased emoluments—I think that is the correct word—were announced for the Army, it was afterwards found that as a result of the taxation of allowances, in many cases people were no better off and others were, in fact, worse off.

Sir S. Cripps: I do not think it would be accurate to say that. In some particular instance, if it is isolated, it may


be that there was not as much pay, but if we take the total of the emoluments that were paid, I cannot guarantee it but I think that in every case people were better off—and no doubt they needed to be, because their expenses were higher. I want to make it clear that I am not saying whether they have got enough or not. All I am arguing is the question whether this method of regulating taxation is the right one or not.

Brigadier Head: I do not think that most of us on these benches would object so much to the principle of taxation if we thought that as a result of taxation the amount of payments to the person receiving the allowance was adequate for his needs. But our point is that irrespective of the fact that the cost of living has risen very considerably since before the war, a man is getting less allowance now when he is taxed than he was before when he was tax free, despite the rise in the cost of living.

Sir S. Cripps: The hon. and gallant Gentleman and many others want to make the point that they think the remuneration is not sufficiently high. The point I am making now is that if that be the case—and let me assume it is for a moment—this is the wrong way to try to correct it. It would be wrong if some hon. Members were to say that miners' remuneration is not sufficient and that we should introduce some special provisions as regards taxing miners. That is the wrong way to do it. The right way to do it is to pay the miners more and let them still pay whatever taxation falls upon them, if that is a necessity. What I am saying here is that if there is a case to be met here, the case cannot be met by casual dealing with Income Tax. It must be met by a re-consideration of the whole situation, and a proper dealing with the rates of remuneration.

Earl Winterton: That is what we have been pressing for the past five years.

Commander Noble: Would not the right hon. and learned Gentleman agree that the general basis of the 1945 Pay Code was that Income Tax would go down? Many of us on this side of the Committee have had it categorically from the Service Ministers that that was the basis of the whole Pay Code.

Sir S. Cripps: I presume it has always been the hope of everybody that taxes would go down. That is a very common hope. Of course, they have gone down from 10s. to 9s., but that is not a very big fall, perhaps, in the consideration of some people. Again, I think that is really not a relevant point. The point is that this new structure was erected upon the basis of a certain type of taxation which was explicitly set out and which was laid down in order to bring uniformity into a system which prior to that had not been uniform. It really would be quite wrong now to remove that basis which has been laid down to try and correct the total amount of remuneration which is received. If the total amount is to be corrected, it must be corrected by other means. What has been laid down as the fair and proper method of taxation so as to spread the burden should be continued, but the alterations must be made elsewhere, if they are to be made.
I would ask hon. Members not to think that because I am turning down this proposal I am unsympathetic or that I do not think men in the Services are doing a good job, because it really is not quite fair to take that point of view. Many of us have to have some regard to guarding the national revenue and we cannot quite casually do things of this kind. I think, therefore, that the right method is to leave the tax as it is and, on appropriate occasions, for hon. Members to take the steps they think necessary to change the total remuneration.

Mr. Boyd-Carpenter: May I ask the right hon. and learned Gentleman to deal with an issue with which he has not so far dealt? Whatever the rates of pay, and whether they are tax free allowances or not, why is there disparity of treatment between two officers of the same rank, one of whom receives allowances in kind tax free while the other, who is supposed to have the equivalent of those allowances, is subject to tax?

Sir S. Cripps: The basis of these supposed equivalents was the knowledge and understanding that they were taxed. That is the whole fallacy. The whole of this structure is based upon the assumption that these three types of allowances would be taxed; the figures and everything else have been fixed in relationship to that state of affairs. Obviously,


therefore, it would not be right to disturb that state of affairs, upon which the whole structure has been erected.

Sir G. Jeffreys: Is the right hon. and learned Gentleman not mistaken in thinking that this pressure from my hon. Friends is for the purpose of increasing the emoluments? It is, on the contrary, a question of whether the allowances are sufficient to provide the service for which they are intended, for instance, in the matter of the provision of houses. Are the allowances given sufficient to provide suitable houses for officers after deduction of Income Tax?

Sir S. Cripps: I can only answer that by saying that these allowances were included in the original state of affairs on the basis that they were subject to Income Tax. If they were not sufficient it is not because they have been taxed, but because they must have been wrongly calculated originally when they were made subject to Income Tax. I think that that is a false point.

8.15 p.m.

Air-Commodore Harvey: All of us are more than disappointed at what the Chancellor of the Exchequer said. I can quite see the difficulties of his position because this new pay code was brought into being, but the least he could have done, if he is in touch with Service opinion at all, which I do not think he is, was to give the Committee some assurance that he or the Government would look into this matter in some detail. That would go some way towards satisfying our doubts.
The Chancellor said there was too great an inequality in conditions. I submit there is too great a difference between conditions of service. The man who gets home and has every weekend off compared with the serving officer or N.C.O. who is posted all over the world, living sometimes in very unpleasant conditions, is something that the Chancellor ignored entirely. He says that this is the wrong way in which to correct that position. For five years we have made speeches, three, four and five times in a year on the Services Estimates and debates and we have never been given any encouragement by the Government. We have done everything we can to see if we could get any satisfaction for those concerned.

Certainly in our policy at the election—I do not want to go too wide of the mark in this Debate—we made our position very clear. That is one of the things which the Government do not criticise us for in these Debates.
I agree with my hon. and gallant Friend the Member for Chelsea (Commander Noble) when he said that when the pay code was introduced it was anticipated that the rate of Income Tax would come down. If that had happened it would not have been too bad.

Mr. Houghton: Is the hon. and gallant Gentleman suggesting that Income Tax has not come down, bearing in mind the increase in the allowances and the wide extension of the belt of the lower rates of tax?

Air-Commodore Harvey: To suggest that Income Tax has come down may be one thing, but indirect taxation and the cost of living have steadily increased in the last five years. That is exactly what the electors are complaining about at the present time in addition to those in the Services.
I submit the Chancellor of the Exchequer is out of touch with Service personnel, and the Secretary of State for War should inform him of the feeling in the ranks and among the officers, he having had experience in two Services. Most of the officers are now worse off than they were 25 years ago. The hon. Member for Dudley (Mr. Wigg) asked us to give some comparisons. I will give him one. In 1927 I was a flying officer in the Royal Air Force. That was the equivalent of a first-lieutenant in the Army. I drew £32 a month, on which I paid 24s. Income Tax. I lived extremely well, and was very happy on it. The flying officers today still receive the same rate of pay but those for the N.C.O.s and ranks have gone up a little bit.

Mr. Wigg: The hon. and gallant Gentleman was a flying officer then. About the same time I was a sergeant with a wife and three kiddies and all I got was 9s. a day and I was not on the married quarters roll.

Air-Commodore Harvey: I was submitting that the pay for the ranks had gone up, but that the rate of pay for the officer is still the same as it was 20 years ago. Whatever else the Socialist Government may have done, they have made


life for the junior officer more difficult. Civilians in good jobs are not going to join the Services if they can stay in their civilan jobs. My hon. Friend the Member for Worcester (Mr. Ward) quite truly said recently that a civilian batman in the Royal Air Force earned more than a pilot officer flying one of the modern jet aircraft at 600 miles an hour. Let the right hon. and learned Gentleman read the casualty list of the R.A.F. On many days he will find casualties to pilots flying modern aircraft. They do not complain about that, for that is part of their job. I would ask the Government to take that point into consideration when thinking of emoluments.
These officers are posted with their families to different parts of the world, and the Royal Air Force runs no education scheme like the Army. As a consequence, they are unable to get their children into Service schools and they have to pay high fees to educate their children, that education being constantly interrupted by postings. They are paying high rents for their furnished houses because of the lack of married quarters, and they simply cannot live on what they are getting. The wives of young officers living abroad and of N.C.O.'s, too, have to go out to work in very difficult climates like the Middle and Far East. It is quite wrong that they should have to do that in the tropics.
The Government should really tackle this problem. I do not care which way they do it, whether by giving more basic pay or accepting this new Clause, but if they would undertake to do something they would satisfy to some extent the officers and other ranks, provided they eventually receive more than they are receiving today to counteract the increased cost of living. We on this side of the Committee do not want to see conscription go on for ever. We believe that if the problem is tackled correctly there would be more volunteers of the right type wishing to make the Services their career. I ask the Chancellor of the Exchequer and the Government to give this matter their serious attention, and if they do not do so we shall when we come into power.

Mr. Lyttelton: Many of us see great cogency in the Chancellor's argument about how desirable it is that this result

should be achieved. Notwithstanding that the method, my hon. Friends and I feel that we would like to see something done. For five years we have continually pressed this subject, but the position remains unalleviated. We should be satisfied if the Chancellor would say that these matters of pay would pass immediately under review. I do not use that in the sense that nothing is to happen. This has become a very urgent question, and something should be done, ignoring for the moment how it should be done. As my hon. and gallant Friend said, what really matters is what is coming in. It is a matter which should be reviewed at once, and if the Chancellor would give us an assurance on that point that would satisfy us on these benches.

Hon. Members: Answer.

Mr. Houghton: I think the speech to which we have just listened confirms the opinion on this side of the Committee that most of the contributions made by hon. Members opposite would have been more appropriate to a Debate on the Estimates than to a discussion of the principles of taxation. We are, after all, considering a proposal to add a new Clause to the Finance Bill to exempt from taxation certain allowances now being paid to the members of the Forces. So it is a question of taxation and not of the adequacy of those allowances or of the adequacy of the pay of the Forces generally, and I think we shall only get into a worse state of confusion if we continue to mix up the principles of taxation with the level of remunerations. Here we are discussing a matter of taxation, and I think that, on that point, the Chancellor made an overwhelming case in support of the need for continuing on as uniform a basis as possible the principle that taxation should be levied on income, and that allowances are, for the most part and in most cases, income.
It is quite true that at the time when the White Paper on pay and allowances in the Forces was issued, account had been taken of the fact, in revising both the allowances and the pay, that under the new schemes these allowances would be subject to Income Tax. The hon. Member for Blackpool, North (Mr. Low) referred to certain allowances which are paid in the Civil Service on transfer of an established officer from one station to another. I can


say from personal knowledge of those negotiations that when we invited the opinion of the Commissioners of Inland Revenue whether such allowances would be subject to tax, and we were advised that they would, we then set to work to recalculate the transfer allowance in the knowledge that the allowances paid would be subject to tax. That is what was done when the allowances were revised under the White Paper scheme of 1946, and that is what was done when there was a recent review of allowances payable in the National Fire Service. So in fixing these allowances an attempt has been made to maintain the principle that allowances are subject to tax, and that the amount of the allowance should be taken into account.

Brigadier Clarke: The hon. Member will accept, then, that if we tax allowances not taxed before we should add that amount of the tax, so that when we tax the allowances they will still be producing the same amount of emoluments as before? That did not happen.

Mr. Houghton: The difficulty, of course, in increasing allowances to take account of taxation is that the amount of taxation will be variable according to the personal circumstances of the individual, whereas one must add a uniform sum of the allowance for everybody to take into account the fact that Income Tax will be levied on the allowances. So that obviously it was never supposed for a moment that, because these allowances would be subject to tax and increased because of that, all would be better off and all would have the same increase in net incomes as a result. Some were worse off when tax was levied; some were better off. I am sure that hon. Members opposite will remember that the White Paper proposals on allowances and pay cost a great deal of money, and that the net cost to the State was very considerable.
So I think that it would be as well if we do keep these things entirely separate—the principles of taxation and the level of taxation, which is not under consideration now. The acceptance of this proposed new Clause would set in train many repercussions of considerable inconvenience and difficulty to the Revenue.

Mr. Lyttelton: May I ask the Chancellor if he will give me some answer to the point that I raised?

Sir S. Cripps: I am afraid I cannot go any further than what I have already stated, and I must deal with this new Clause as what it is, and say that this is not a matter that we can deal with by way of amendment to the Income Tax law. If it is to be dealt with at all, the question of the remuneration of the Forces must be dealt with in some other way.

Mr. Low: Before we go any farther I must say I think the Chancellor has really not met the spirit in which my right hon. Friend addressed the Committee. We are all anxious to get a proper answer to this and we should have liked to have some information from the Chancellor of what is going on. Since he has answered as he has, I want to get from him now, if I can, a further answer to some of the points made by my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and me, which are really very relevant to the smaller point on which he chose to dismiss our argument. In particular the Chancellor has just told us that, in comparison with the position that operated before 1946, allowances have been increased to cover the amount of tax that was due to be paid upon them. That, I think, was his argument. I am sure he will correct me if I am wrong.
Why, then, is it that in the National Fire Service the Under-Secretary of State for the Home Department said that that procedure would not do. He said that if we increased the rent alowances to take account of the average amount of Income Tax paid it would mean we should ignore the particular man's liability. It is the particular man's liability that we have put to the Chancellor, and he has simply not answered at all. In particular he has not answered the point that a senior officer is not given net such a large marriage allowance as the junior officer. Why is that? Why cannot he answer these points instead of dismissing them when—as I am sure he will acknowledge—we have tried very reasonably to narrow the point of this Debate.

Sir S. Cripps: The hon. Gentleman asked me if I would answer the point he raised. That answer I thought I gave quite clearly, that when this new structure of remuneration was introduced in


1946 it was introduced upon the basis of tax being allowed for on these three types of allowance which I have mentioned. That was thought out and was considered, and I do not think that at that time it was criticised—generally criticised—as not being the best way. Nor indeed on the Estimates has that been criticised as being the method of building up the remuneration. That is all we are dealing with here. We are not dealing with the total amount of remuneration. We are dealing with the method with which it has been built up, and the method must be to put the Income Tax charge on those three types of allowances. There is no reason at all for getting rid of that method if for the last four years it has been considered a reasonable way.

Mr. Lyttelton: I must say we are very dissatisfied on these benches with the way in which the Government have treated our proposition. We want to get something to relieve what is really a pressing problem in the Services. All we get is a rather desiccated statement that the method we have suggested is not the best. If the Chancellor would say that the matter
of Service pay was a subject which preoccupied the Government, and that he would look into it as a matter of urgency, we should have some reason to suppose that this matter would be looked into, instead of being deferred once again to the Greek Kalends. If they really persist in this attitude we shall, very reluctantly, have to divide the Committee.

8.30 p.m.

Mr. Quintin Hogg: I really do not see how my hon. Friends have any other course open to them but to divide the Committee. It is unfortunate that this should be so, because I do not think that any one would care to treat the pay or remuneration of the Armed Forces as a matter for a Division, which must necessarily take a party form. If a grievance remains wholly unsatisfied at the end of a Debate, and those of us who put it forward feel that it is justified, I really do not see what other course is open honourably to us other than to take a Division, in order to record our opinion on the matter.
The Chancellor has committed himself to the definite point of view that we are

bound to look at this matter simply as a question of tax law, in complete divorce from the state of grievance as to the rate of remuneration of the Services. I should have been prepared to accept that plea, although as a matter of fact I think it is mistaken, if it had been accompanied by
some sort of promise that the general grievance would be remedied in some way or other. This Committee cannot leave a grievance unremedied simply because by the rules of order the Opposition are compelled to express their dissatisfaction in a particular way.
We are entitled to demand a substantial relief of grievance and not simply an appeal to legalistic, fiscal argument. My own view is that the legalistic, fiscal argument is mistaken. The Chancellor of the Exchequer has argued plausibly that the allowances payable to the Forces, being part of income, should be taxed as income, and has sought to compare it with the remuneration paid in various civilian occupations. He cited the occupation in the mines.

Sir S. Cripps: indicated dissent.

Mr. Hogg: That illustration, it seems to me, overlooks the fact that, historically speaking, the remuneration and allowances of the Services have been built up in a way which renders comparison absolutely inappropriate.

Sir S. Cripps: I did not make it.

Mr. Hogg: Historically we have built up our remuneration of the Services on a theory of basic pay which gives to the single man a rate of remuneration far lower than that which a comparable person would earn in civilian life. These allowances have grown up very largely in order to make provision for special cases and they have been a form of economy by the State. They have developed in such a way that they compensated the serving man who found himself in one of several special situations for the low rate of basic remuneration which the Services have received. I do-not think it is fair to treat these allowances entirely in the same way as we should treat comparable sources of income in civilian life. Therefore, the legal argument is doubtful.
No one would accuse me of being an unduly military figure. I did my best when the time came. It did so happen


that during part of my life I came very closely into touch with some professional officers with whom I have remained upon terms of friendship. I have been profoundly disturbed by the way in which some of them, whose integrity and devotion to duty are beyond all question, have spoken to me of the way they are now being remunerated professionally as serving professional officers. I am left in the situation that, although I should have

liked to see this matter dealt with by a promise from the Government to remedy the grievances generally, since I can see not the slightest trace of intention to remedy the grievances, there is no other way but to join with my hon. Friends in taking the matter to a Division.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 266; Noes, 295.

Division No. 33.]
AYES
[8.35 p.m


Aitken, W. T.
Drayson, G. B
Kingsmill, Lt.-Col. W. H


Alport, C. J. M.
Drewe, C
Lambert, Hon. G.


Amery, J. (Preston, N.)
Dugdale, Maj. Sir T. (Richmond)
Lancaster, Col. C. G.


Amory, D. Heathcoat (Tiverton)
Duncan, Capt. J. A. L.
Law, Rt. Hon. R. K.


Arbuthnot, John
Dunglass, Lord
Leather, E. H. C.


Ashton, H. (Chelmsford)
Duthie, W. S.
Legge-Bourke, Maj. E. A. H


Assheton, Rt. Hon. R. (Blackburn, W)
Eccles, D. M.
Lennox-Boyd, A. T.


Astor, Hon. M.
Eden, Rt. Hon. A.
Lindsay, Martin


Baker, P
Elliot, Lieut.-Col. Rt. Hon. Walter
Linstead, H. N


Baldock, J. M.
Erroll, F. J.
Liewellyn, D.


Baldwin, A. E.
Fisher, Nigel
Lloyd, Rt. Hon. G. (King's Norton)


Banks, Col. C.
Fletcher, W. (Bury)
Lloyd, Maj. Guy (Renfrew, E.)


Beamish, Maj. T. V. H
Fort, R.
Lloyd, Selwyn (Wirral)


Bell, Rt. M.
Foster, J. G.
Lockwood, Lt.-Col. J. C


Bennett, Sir P. (Edgbaston)
Fraser, Hon. H. C. P. (Stone)
Longden, G. J. M. (Herts, S. W.)


Bennett, R. F. B. (Gosport)
Fraser, Sir I. (Lonsdale)
Low, A. R. W.


Bennett, W. G. (Woodside)
Fyfe, Rt. Hon. Sir D. P. M.
Lucas, Major Sir J. (Portsmouth, S.)


Bevins, J. Rt. (Liverpool, Toxteth)
Gage, C. H.
Lucas, P. B. (Brentford)


Birch, Nigel
Galbraith, Cmdr. T. D. (Pollok)
Lucas-Tooth, Sir H


Bishop, F. P.
Gammans, L. D.
Lyttelton, Rt. Hon. O


Black, C. W.
Garner-Evans, E. H. (Denbigh)
McAdden, S. J.


Boles, Lt.-Col. D. C. (Wells)
Gates, Maj. E. E.
McCallum, Maj. D.


Boothby, R.
Glyn, Sir R.
McCorquodale, Rt. Hon. M. S


Bower, N.
Gomme-Duncan, Col. A.
Macdonald, A. J. F. (Roxburgh)


Boyd-Carpenter, J. A.
Gridley, Sir A.
Mackeson, Brig. H. R.


Braine, B.
Grimston, Hon. J. (St. Albans)
McKibbin, A


Braithwaite, Lt.-Comdr. J. G.
Grimston, R. V. (Westbury)
Maclay, Hon. J S


Bromley-Davenport, Lt.-Col. W.
Harden, J. R. E.
Maclean, F H R.


Browne, J. N. (Govan)
Harris, R. R. (Heston)
MacLeod, Iain (Enfield, W.)


Buchan-Hepburn, P. G. T.
Harvey, Air-Codre. A. V. (Macclesfield)
MacLeod, John (Ross and Cromarty)


Bullus, Wing-Commander E. E.
Harvey, I. (Harrow, E.)
Macpherson, N. (Dumfries)


Burden, Squadron-Leader F. A.
Hay, John
Maitland, Comdr. J. W.


Butcher, H. W.
Head, Brig. A. H.
Marlowe, A. A. H.


Butler, Rt. Hon. R. A. (S'ffn W'ld'n)
Heald, L. F
Marples, A. E.


Carr, L. R. (Mitcham)
Heath, Col. E. R.
Marshall, D. (Bodmin)


Carson, Hon. E.
Henderson, John (Cathcart)
Marshall, S. H. (Sutton)


Channon, H.
Hicks-Beach, Maj. W. W.
Maude, A. E. U. (Ealing, S.)


Clarke, Col. R. S. (East Grinstead)
Higgs, J. M. C.
Maudling, R.


Clarke, Brig. T. H. (Portsmouth, W.)
Hill, Mrs. E. (Wythenshawe)
Medlicott, Brigadier F.


Clyde, J. L.
Hill, Dr. C. (Luton)
Mellor, Sir J.


Colegate, A.
Hinchingbrooke, Viscount
Molson, A. H. E.


Conant, Maj. R. J. E.
Hirst, Geoffrey
Moore, Lt.-Col. Sir T.


Cooper, A. E. (Ilford, S.)
Hogg, Hon. Q.
Morrison, Maj. J. G. (Salisbury)


Cooper-Key, E. M.
Hollis, M. C.
Morrison, Rt. Hon. W. S. (Cirencester)


Corbett, Lieut.-Col. U. (Ludlow)
Holmes, Sir J. Stanley (Harwich)
Mott-Radclyffe, C. E.


Craddock, G. B. (Spelthorne)
Hope, Lord J.
Nabarro, G.


Cranborne, Viscount
Hopkinson, H. L. D'A.
Nicholls, H.


Crookshank, Capt. Rt. Hon. H. F. C.
Hornsby-Smith, Miss P.
Nicholson, G


Cross, Rt. Hon. Sir R.
Horsbrugh, Miss F.
Nield, B. (Chester)


Crosthwaite-Eyre, Col. O. E.
Howard, G. R. (St. Ives)
Noble, Comdr. A. H P


Crouch, R. F.
Howard, S. G. (Cambridgeshire)
Nugent, G. R. H.


Crowder, F. P. (Ruislip-Northwood)
Hudson, Sir Austin (Lewisham, N.)
Nutting, Anthony


Crowder, Capt. John F. E. (Finchley)
Hudson, Rt. Hon. R. S. (Southport)
Oakshott, H. D.


Cundiff, F. W.
Hudson, W. R. A. ([...] N.)
Odey, G. W.


Cuthbert, W. N.
Hurd, A. R.
O'Neill, Rt. Hon. Sir H.


Darling, Sir W. Y. (Edinburgh, S.)
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Ormsby-Gore, Hon. W. D.


Davidson, Viscountess
Hylton-Foster, H. B.
Orr, Capt. L. P. S.


Davies, Nigel (Epping)
Jeffreys, General Sir G.
Orr-Ewing, Charles Ian (Hendon, N.)


de Chair, S.
Jennings, R.
Osborne, C.


Deedes, W. F.
Johnson, Howard S. (Kemptown)
Perkins, W. R. D.


Digby, S. Wingfield
Jones, A. (Hall Green)
Peto, Brig. C. H. M


Dodds-Parker, A. D.
Kaberry, D.
Pickthorn, K


Donner, P. W.
Keeling, E. H.
Pitman, I. J.


Douglas-Hamilton, Lord M
Kerr, H. W. (Cambridge)
Powell, J. Enoch




Prescott, Stanley
Spearman, A. C. M.
Vane, W. M. F.


Prior-Palmer, Brig. O.
Spence, H. R. (Aberdeenshire, W)
Vaughan-Morgan, J. K


Profumo, J. D.
Spens, Sir P. (Kensington, S.)
Vosper, D. F.


Raikes, H. V.
Stanley, Capt. Hon. R. (N. Fylde)
Wade, D. W.


Rayner, Brig. R.
Stevens, G. P.
Wakefield, E. B. (Derbyshire, W.)


Redmayne, M.
Steward, W. A. (Woolwich, W.)
Wakefield, Sir W. W. (St. Marylebone)


Remnant, Hon. P.
Stewart, J. Henderson (Fife, E.)
Walker-Smith, D. C.


Renton, D. L. M.
Stoddart-Scott, Col. M.
Ward, Hon. G. R. (Worcester)


Roberts, P. G. (Heeley)
Storey, S.
Ward, Miss I. (Tynemouth)


Robinson, J. Roland (Blackpool, S.)
Strauss, Henry (Norwich, S.)
Waterhouse, Capt. C


Robson-Brown, W. (Esher)
Stuart, Rt. Hon. J. (Moray)
Watkinson, H.


Rodgers, J (Sevenoaks)
Studholme, H. G.
Watt, Sir G. S. Harvie


Roper, Sir H.
Summers, G. S.
Webbe, Sir H. (London)


Ross, Sir R D. (Londonderry)
Sutcliffe, H.
Williams, C. (Torquay)


Russell, R. S.
Taylor, C. S. (Eastbourne)
Williams, Gerald (Tonbridge)


Ryder, Capt. R. E. D
Taylor, W. J. (Bradford, N.)
Williams, Sir H. G. (Croydon, E.)


Sandys, Rt. Hon. D
Teeling, William
Wills, G.


Savory, Prof. D. L
Thomas, J. P. L. (Hereford)
Wilson, Geoffrey (Truro)


Scott, Donald
Thompson, K. P. (Walton)
Winterton, Rt. Hon. Earl


Shepherd, W. S. (Cheadle)
Thompson, R. H. M. (Croydon, W.)
Wood, Hon. R.


Smiles, Lt.-Col. Sir W.
Thorneycroft, G. E. P. (Monmouth)
York, C.


Smith, E. Martin (Grantham)
Thornton-Kemsley, C. N.
Young, Sir A. S. L.


Smithers, Peter H. B. (Winchester)
Tilney, John



Smithers, Sir W (Orpington)
Touche, G. C
TELLERS FOR THE AYES:


Smyth, Brig. J. G. (Norwood)
Turton, R. H.
Major Wheatley and


Snadden, W. McN.
Tweedsmuir, Lady
Mr. T G. D. Galbraith




NOES


Acland, Sir Richard
Daines, P
Hardy, E. A


Adams, Richard
Darling, G. (Hillsboro')
Hargreaves, A.


Albu, A. H.
Davies, A. Edward (Stoke, N.)
Harrison, J.


Allen, A. C. (Bosworth)
Davies, Ernest (Enfield, E.)
Hayman, F. H.


Anderson, F. (Whitehaven)
Davies, Harold (Leek)
Henderson, Rt. Hon. A. (Rowley Regis)


Attles, Rt. Hon. C. R.
Davies, R. J. (Westhoughton)
Herbison, Miss M.


Awbery, S. S.
Davies, S. O. (Merthyr)
Hewitson, Capt. M.


Ayles, W. H.
de Freitas, Geoffrey
Hobson, C. R.


Bacon, Miss A.
Deer, G.
Holman, P.


Baird, J.
Delargy, H J.
Holmes, H. E. (Hemsworth)


Balfour, A.
Diamond, J.
Houghton, Douglas


Barnes, Rt. Hon. A. J.
Dodds, N. N.
Hoy, J.


Bartley, P.
Donnelly, D.
Hubbard, T


Bellenger, Rt. Hon. F. J
Donovan, T. N.
Hudson, J. H. (Ealing, N.)


Benson, G.
Driberg, T. E. N
Hughes, Emrys (S. Ayr)


Beswick, F.
Dugdale, Rt. Hon. J. (W. Bromwich)
Hughes, Hector (Aberdeen, N.)


Bevan, Rt. Hon. A (Ebbw Vale)
Dye, S.
Hughes, Moelwyn (Islington, N.)


Bing, G. H. C.
Ede, Rt. Hon. J. C.
Hynd, H. (Accrington)


Blackburn, A. R.
Edwards, John (Brighouse)
Hynd, J. B. (Attercliffe)


Blenkinsop, A.
Edwards, Rt. Hon. N. (Caerphilly)
Irvine, A. J. (Edge Hill)


Boardman, H.
Edwards, W. J. (Stepney)
Irving, W. J. (Wood Green)


Booth, A.
Evans, Albert (Islington, S. W.)
Janner, B.


Bottomley, A. G.
Evans, E. (Lowestoft)
Jay, D. P. T.


Bowen, R.
Evans, S. N. (Wednesbury)
Jeger, G. (Goole)


Bowles, F. G. (Nuneaton)
Ewart, R.
Jeger, Dr. S. W. (St. Pancras, S.)


Braddock, Mrs. E. M.
Fernyhough, E.
Jenkins, R. H


Brockway, A. Fenner
Field, Capt. W. J.
Johnson, James (Rugby)


Brook, D. (Halifax)
Finch, H. J.
Johnston, Douglas (Paisley)



Fletcher, E. G. M. (Islington, E.)
Jones, D. T. (Hartlepool)


Brooks, T. J. (Normanton)
Follick, M.
Jones, Frederick Elwyn (West Ham, S)


Broughton, Dr. A. D. D.
Foot, M. M.
Jones, Jack (Rotherham)


Brown, George (Belper)
Forman, J. C.
Jones, William Elwyn (Conway)


Brown, T. J. (Ince)
Fraser, T. (Hamilton)
Keenan, W.


Burke, W. A.
Freeman, J. (Watford)
Kenyon, C


Burton, Miss E.
Freeman, Peter (Newport)
Key, Rt. Hon. C. W


Butler, H. W. (Hackney, S.)
Gaitskell, Rt. Hon. H. T. N
King, H. M.


Callaghan, James
Ganley, Mrs. C. S.
Kinghorn, Sqn.-Ldr. E.


Carmichael, James
George, Lady M. Lloyd
Kinley, J.


Castle, Mrs. B. A.
Gilzean, A.
Kirkwood, Rt. Hon. D.


Champion, A. J.
Glanville, J. E. (Consett)
Lee, F. (Newton)


Chetwynd, G. R
Gooch, E. G.
Lee, Miss J. (Cannock)


Clunie, J.
Greenwood, A. W. J. (Rossendale)
Lever, L M. (Ardwick)


Cooks, F. S.
Greenwood, Rt. Hn. Arthur (Wakefield)
Lever, N. H. (Cheetham)


Coldrick, W.
Grenfell, D. R.
Lewis, A. W. J. (West Ham, N.)


Collick, P.
Grey, C. F.
Lewis, J. (Bolton, W.)


Collindridge, F.
Griffiths, D. (Rother Valley)
Lindgren, G. S.


Cook, T. F.
Griffiths, Rt. Hon. J. (Llanelly)
Lipton, Lt.-Col, M.


Cooper, G. (Middlesbrough, W.)
Griffiths, W. D. (Exchange)
Logan, D. G.


Cove, W. G.
Gunter, R. J.
Longden, F. (Small Heath)


Craddock, George (Bradford, S.)
Hale, J. (Rochdale)
McAllister, G.


Crawley, A.
Hale, Leslie (Oldham, W.)
MacColl, J. E.


Cripps, Rt. Hon. Sir S.
Hall, J. (Gateshead, W.)
McGhee, H. G


Crosland, C. A. R.
Hall, Rt. Hn. W. Glenvit (Colne V'll'y)
McGovern, J.


Crossman, R. H. S.
Hamilton, W. W.
McInnes, J.


Cullen, Mrs. A.
Hannan, W.
Mack, J D


Daggar, G.
Hardman, D. R
McKay, J. (Wallsend)







Mackay, R. W. G. (Reading, N.)
Popplewell, E.
Thomas, I. O. (Wrekin)


McLeavy, F
Porter, G
Thomas, I. R. (Rhondda, W.)


MacMillan, M. K. (Western Isles)
Price, M. Philips (Gloucestershire, W.)
Thorneycroft, Harry (Clayton)


McNeil, Rt. Hon. H.
Proctor, W. T.
Thurtle, Ernest


MacPherson, Malcolm (Stirling)
Pryde, D. J.
Timmons, J.


Mainwaring, W. H.
Pursey, Comdr. H.
Tomlinson, Rt. Hon. G


Mallalieu, E. L. (Brigg)
Rankin, J.
Turner-Samuels, M.


Mallalieu, J. P. W. (Huddersfield, E.)
Rees, Mrs. D.
Usborne, Henry


Mann, Mrs. J.
Reeves, J.
Vernon, Maj. W. F.


Manuel, A. C.
Reid, T. (Swindon)
Viant, S. P.


Marquand, Rt. Hon. H. A.
Reid, W. (Camlachie)
Wallace, H. W.


Mathers, Rt. Hon. George
Rhodes, H.
Watkins, T. E.


Mellish, R. J.
Richards, R.
Webb, Rt. Hon. M. (Bradford. C.)


Messer, F.
Robens, A.
Weitzman, D


Middleton, Mrs. L.
Roberts, Emrys (Merioneth)
Wells, P. L. (Faversham)


Mikardo, Ian
Roberts, Goronwy (Caernarvonshire)
Wells, W. T. (Walsall)


Mitchison, G. R.
Robertson, J. J. (Berwick)
West, D. G.


Moeran, E. W.
Robinson, Kenneth (St. Pancras, N.)
Wheatley, Rt. Hn. John (Edinb'gh, E.)


Monslow, W.
Rogers, G. H. R. (Kensington, N.)
White, Mrs. E. (E. Flint)


Moody, A. S.
Ross, William (Kilmarnock)
White, H. (Derbyshire, N. E.)


Morgan, Dr. H. B
Royle, C.
Whiteley, Rt. Hon. W.


Morley, R.
Shackleton, E. A. A.
Wigg, George


Morris, P. (Swansea, W.)
Shawcross, Rt. Hon. Sir H
Wilcock, Group-Capt. C. A. B.


Morrison, Rt. Hon. H. (Lewisham, S.)
Shinwell, Rt. Hon. E.
Wilkes, L.


Mort, D. L.
Shurmer, P. L. E.
Wilkins, W. A.


Moyle, A.
Silverman, J. (Erdington)
Willey, F. T. (Sunderland)


Mulley, F. W
Silverman, S. S. (Nelson)
Willey, O. C. (Cleveland)


Murray, J. D.
Simmons, C J.
Williams, D. J. (Neath)


Nally, W.
Slater, J.
Williams, Ronald (Wigan)


Neal, H.
Smith, Ellis (Stoke, S.)
Williams, Rt. Hon. T. (Don Valley)


Noel-Baker, Rt. Hon. P. J
Snow, J. W.
Williams, W. T. (Hammersmith, S.)


Oldfield, W. H.
Sorensen, R. W.
Wilson, Rt. Hon. d. H. (Huyton)


Oliver, G. H.
Soskice, Rt. Hon. Sir F.
Winterbottom, I. (Nottingham, C.)


Orbach, M.
Steele, T.
Winterbottom, R. E. (Brightside)


Padley, W. E.
Stewart, Michael (Fulham, E.)
Wise, Major F. J.


Paling, Rt. Hon. Wilfred (Dearne V'lly)
Stokes, Rt. Hon. R. R.
Woodburn, Rt. Hon. A.


Paling, Will T. (Dewsbury)
Strachey, Rt. Hon. J.
Woods, Rev. G. S.


Pannell, T. C.
Strauss, Rt. Hon. G. R. (Vauxhall)
Wyatt, W. L.


Pargiter, G. A.
Summerskill, Rt. Hon. Edith
Yates, V. F.


Parker, J.
Sylvester, G. O.
Younger, Hon. Kenneth


Paton, J.
Taylor, H. B. (Mansfield)



Pearson, A.
Taylor, R. J. (Morpeth)
TELLERS FOR THE NOES:


Peart, T. F.
Thomas, D. E. (Aberdare)
Mr. Bowden and Mr. Sparks.


Poole, Cecil
Thomas, George (Cardiff)

New Clause.—(EXEMPTION FROM INCOME TAX ACTS OF PENSIONS, GRANTS AND ALLOWANCES TO WAR WIDOWS.)

Section twenty-seven of the Finance Act, 1922, is hereby repealed, and the following section shall be substituted therefor:
27. Pensions, grants, or allowances granted by the Minister of Pensions under a Royal Warrant, Order in Council or order administered by him to widows and widowers of members of the naval, military, or air forces of the Crown in respect of themselves or their children shall not be reckoned in computing the income of such widows or widowers for any of the purposes of the Income Tax Acts."—[Mr. Turton.]

Brought up, and read the First time.

8.45 p.m.

Mr. Turton: I beg to move, "That the Clause be read a Second time."
The object of this Clause is to exempt from Income Tax the pensions and allowances granted to war widows. The present position of the law that is that any wound pension, any retired pay of disabled officers, or any disability pension, is exempted from Income Tax by Section 16 of the Finance Act, 1919. Any war

gratuities are exempted from Income Tax by Section 23 of the Finance (No. 2) Act, 1945. But as far as the payments to war widows are concerned, only those allowances to them which are in respect of their children are exempted from Income Tax, by Section 27 of the Finance Act, 1922. Therefore, the only payment which is excluded from the exemption from Income Tax is any allowances which are made to a war widow.
I ask the Committee to consider whether, at the present time, that is a fair position. If a serving soldier is killed in war, any compensation in respect of his casualty must bear Income Tax. If, on the other hand, he is severely disabled, exemption from Income Tax is granted. I suggest that that is a very anomalous position, and I ask the Government and the Committee now to rectify it.
I would remind the Government that the last time this matter was debated was on 27th June, 1922, when Lord Lawson, whom we remember better as the former hon. Member for Chester-le-Street (Mr. Jack Lawson), moved this same new


Clause in an earlier Parliament. It had the support of the whole of the Members of the Labour Party, together with a number of Conservative and Liberal Members who were interested in the position of war widows. In moving this Clause I carefully avoid trying to trade on sentiment. There is a great temptation to do so, but I do not want the Committee to be led away by sentiment. I am quite certain, however, that every hon. Member is anxious to see that those who suffer by losing their husbands through war should not be unequally penalised by Income Tax on compensation for their loss.
The proposed Clause would not cost a large sum and I suggest to the Government that from what they have gained through de-rationing of petrol, less what they have to pay on National Assistance and concessions to agricuture and in double taxation, there will still be left a sufficient margin to do belated justice by this Clause to war widows. If that is not so, I submit to the Committee that war widows are more deserving than any other object I have mentioned. Therefore, I hope the Government will accept the Clause.

Mr. Wigg: I think the hon. Member for Thirsk and Malton (Mr. Turton) overlooked a change in circumstances. Before the war, if a Regular soldier died the pension to his widow was paid by the Royal Hospital, Chelsea. When the war ended there was a possibility that the prewar practice would be reverted to, but a change has been made and now the pensions of all widows of men who died in wartime are paid by the Ministry of Pensions. If this Clause were adopted the situation would be that pensions to widows of soldiers killed in action would be exempted from Income Tax and those paid to widows of soldiers who died since the end of the war would be exempted. Those whose husbands died between the two wars, and who are receiving pensions from the Royal Hospital, Chelsea, would not have the pensions exempted from Income Tax. I hope that my right hon. and learned Friend will take note of that and, if he intends accepting the new Clause, that he will, before the Report stage, put down an Amendment which will bring it into line with the changed circumstances I have mentioned.

Mr. Gaitskell: Whether the particular wording of this new Clause is in order or not, I think we all understand its purpose. As the hon. Member for Thirsk and Malton (Mr. Turton) has reminded us, this subject has been discussed on a number of occasions. He is perfectly entitled to point out that the Labour Party supported it in the past, and I am entitled to point out that Conservative Governments have rejected it in the past. Indeed, a cynic might say that the only thing which remained perfectly clear on many of these financial matters is that the Opposition always asked for more and the Government always refused it.
More seriously, there is a fundamental difficulty about the proposed new Clause and that is that it provides benefits in inverse ratio to the needs of the recipients. The poor widow would receive no benefit because her income would be below the exemption limit, while the widow who is well to do will not only gain tax on the standard rate, but also Surtax as well. That would not be what the hon. Member would seek to achieve by making a change of this kind. In effect, the relief would amount to an indirect and concealed addition to the pension denied to those who need it most.
If the hon. Member will recall what amounts of pensions are paid to different widows he will understand what I mean. Those paid to widows of non-commissioned members of the Services vary from £1 to 40s. Those paid to widows of officers vary from £130 a year in the case of widows of subalterns to £700 a year in the case of widows of field marshals. If the pension is the only income, there is no Income Tax liability upon the widow of the non-commissioned member of the Services or widow of the subaltern. I am not attempting to raise the point that some get more than others. I am simply pointing out that this Clause would only benefit those who are comparatively well to do.
The other difficulty is also fundamental. Although there have been one or two exceptions—the case of the pensions of the wounded and the case of the children—we have to be very careful before we depart from the principle that liability to pay tax must depend upon the ability to pay. I cannot feel that there is real justification for differentiating in this


matter between the soldier's widow and a neighbour who has the same income from another source.

Mr. Turton: Could the right hon. Gentleman tell us any other grant or allowance paid by the Ministry of Pensions which is subject to Income Tax?

Mr. Gaitskell: The hon. Member has mentioned the two cases that are not subject to Income Tax. I think there are other grants paid which are subject to Income Tax, but without going into the matter I cannot be quite sure. But my argument is surely applicable. Liability ought to depend upon ability to pay. If we wish to afford relief it is better to do it by general reductions in rates of tax and

increases in relief, as we have consistently done in the past five years; and the reductions made this year in the initial rates of Income Tax will assist the small taxpayer. We feel that that is a much better way of dealing with the problem. In the circumstances, I must advise the Committee to reject this Clause because it would really benefit the well-to-do, the people who need it least, and would not help those who might be said to need it more; and because it is clearly contrary to the general principles upon which Income Tax is levied, and to which we must adhere.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 257; Noes, 289.

Division No. 34.]
AYES
[9.0 p.m


Aitken, W. T.
Darling, Sir W. Y. (Edinburgh, S.)
Howard, G. R. (St. Ives)


Alport C. J. M.
Davidson, Viscountess
Howard, S. G. (Cambridgeshire)


Amery, J. (Preston, N.)
Davies, Nigel (Epping)
Hudson, Sir Austin (Lewisham, N.)


Amory, D. Heathcoat (Tiverton)
de Chair, S.
Hudson, W. R. A. (Hull, N.)


Arbuthnot John
Deedes, W. F.
Hurd, A. R.


Ashton, H (Chelmsford)
Digby, S. Wingfield
Hutchison, Lt.-Com. Clark (E'b'rgh W.)


Assheton, Rt. Hon. R. (Blackburn, W.)
Dodds-Parker, A. D
Hylton-Foster, H. B.


Astor, Hon. M.
Donner, P. W.
Jeffreys, General Sir G.


Baldock, J. M.
Douglas-Hamilton, Lord M
Jennings, R.


Baldwin, A. E.
Drayson, G. B,
Johnson, Howard S. (Kemptown)


Banks, Col. C.
Drewe, C
Jones, A. (Hall Green)


Beamish, Maj. T. V. H.
Dugdale, Maj. Sir T. (Richmond)
Kaberry, D.


Bennett, Sir P. (Edgbaston)
Duncan, Capt. J. A. L.
Kerr, H. W. (Cambridge)


Bennett, R. F. B. (Gosport)
Dunglass, Lord
Kingsmill, Lt.-Col. W. H


Bennett, W. G. (Woodside)
Duthie, W. S.
Lambert, Hon. G


Bevins, J. R. (Liverpool, Toxteth)
Eccles, D. M.
Lancaster, Col. C. G


Birch, Nigel
Erroll, F. J
Langford-Holt, J.


Bishop, F. P
Fisher, Nigel
Law, Rt. Hon. R. K.


Black, C. W.
Fletcher, W. (Bury)
Leather, E. H. C.


Boles, Lt.-Col. D. C. (Wells)
Fort, R.
Legge-Bourke, Maj. E. A. H


Bossom, A. C.
Foster, J. G.
Lennox-Boyd, A. T


Bower, N.
Fraser, Sir 1. (Lonsdale)
Lindsay, Martin


Boyd-Carpenter, J. A.
Fyfe, Rt. Hon. Sir D. P. M.
Linstead, H. N


Braine, B.
Gage, C. H.
Llewellyn, D.


Braithwaite, Lt.-Comdr. J. G.
Galbraith, Cmdr. T. D. (Pollok)
Lloyd, Maj. Guy (Renfrew, E.)


Bromley-Davenport, Lt.-Col. W.
Gammans, L. D.
Lloyd, Selwyn (Wirral)


Browne, J. N. (Govan)
Garner-Evans, E. H (Denbigh)
Lookwood, Lt.-Col. J. C.


Buchan-Hepburn, P. G. T.
Gates, Maj. E. E.
Longden, G. J. M. (Herts, S. W.)


Bullus, Wing-Commander E. E.
Glyn, Sir R.
Low, A. R. W


Burden, Squadron-Leader F. A.
Gomme-Duncan, Col. A
Lucas, Major Sir J. (Portsmouth. S.)


Butcher, H. W.
Gridley, Sir A.
Lucas, P. B. (Brentford)


Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
Grimston, Hon. J. (St. Albans)
Lucas-Tooth, Sir H.


Carr, L. R. (Mitcham)
Grimston, R. V. (Westbury)
Lyttelton, Rt. Hon. O.


Carson, Hon. E.
Harden, J R. E.
McAdden, S. J.


Channon, H.
Harris, R. R. (Heston)
McCallum, Maj. D.


Clarke, Col. R. S. (East Grinstead)
Harvey, Air-Codre. A. V. (Macclesfield)
McCorquodale, Rt. Hon. M. S.


Clarke, Brig. T. H. (Portsmouth, W.)
Harvey, I. (Harrow, E.)
Macdonald, A. J. F. (Roxburgh)


Clyde, J. L.
Hay, John
Macdonald, Sir P. (I. of Wight)


Colegate, A.
Head, Brig. A H
Mackeson, Brig. H. R.


Conant, Maj. R. J. E.
Heald, L. F.
McKibbin, A.


Cooper, A. E. (Ilford, S.)
Heath, Col. E. R.
McKie, J. H. (Galloway)


Cooper-Key, E M.
Henderson, John (Cathcart)
Maclay, Hon J. S.


Corbett, Lieut.-Col. U. (Ludlow)
Hicks-Beach, Maj. W. W
Maclean, F. H. R.


Craddock, G. B. (Spelthorne)
Higgs, J. M. C.
MacLeod, Iain (Enfield, W.)


Cranborne, Viscount
Hill, Mrs. E. (Wythenshawe)
MacLeod, John (Ross and Cromarty)


Crookshank, Capt. Rt. Hon. H. F. C.
Hill, Dr. C. (Luton)
Macpherson, N. (Dumfries)


Cross, Rt. Mon. Sir R.
Hirst, Geoffrey
Maitland, Comdr. J. W


Crosthwaite-Eyre, Col. O. E.
Hogg, Hon. Q.
Marlowe, A. A. H.


Crouch, R. F.
Hollis, M. C.
Marples, A. E.


Crowder, F. P. (Ruislip-Northwood)
Holmes, Sir J Stanley (Harwich)
Marshall, D (Bodmin)


Crowder, Capt. John F- E. (Finchley)
Hopkinson, H. L. D'A.
Marshall, S. H. (Sutton)


Cundiff, F. W.
Hornsby-Smith, Miss P.
Maude, A. E. U. (Ealing, S.)


Cuthbert, W. N.
Horsbrugh, Miss F
Medlicott, Brigadier F.




Mellor, Sir J.
Robertson, Sir D. (Caithness)
Thompson, K. P. (Walton)


Molson, A. H. E.
Robinson, J. Roland (Blackpool, S.)
Thompson, R. H. M. (Croydon, W.)


Moore, Lt.-Col. Sir T.
Robson-Brown, W. (Esher)
Thorneycroft, G. E. P. (Monmouth)


Morrison, Maj. J. G. (Salisbury)
Rodgers, J. (Sevenoaks)
Thornton-Kemsley, C. N


Morrison, Rt. Hon. W. S. (Cirencester)
Roper, Sir H.
Tilney, John


Mott-Radclyffe, C. E.
Ross, Sir R. D. (Londonderry)
Touche, G. C.


Nabarro, G.
Russell, R. S.
Turton, R. H.


Nicholls, H.
Ryder, Capt. R. E. D.
Tweedsmuir, Lady


Nicholson, G.
Sandys, Rt. Hon. D.
Vane, W. M. F.


Nield, B. (Chester)
Savory, Prof. D. L.
Vaughan-Morgan, J. K.


Noble, Comdr. A. H. P
Scott, Donald
Vosper, D. F.


Nugent, G. R. H.
Shepherd, W. S. (Cheadle)
Wakefield, E. B. (Derbyshire, W.)


Nutting, Anthony
Smiles, Lt.-Col. Sir W.
Wakefield, Sir W. W. (St. Marylebone)


Oakshott, H. D.
Smith, E. Martin (Grantham)
Walker-Smith, D. C.


Odey, G. W.
Smithers, Peter H. B. (Winchester)
Ward, Hon. G. R. (Worcester)


Ormsby-Gore, Hon. W. D.
Smithers, Sir W. (Orpington)
Ward, Miss I. (Tynemouth)


Orr, Capt. L. P. S.
Smyth, Brig. J. G. (Norwood)
Waterhouse, Capt. C.


Orr-Ewing, Charles Ian (Hendon, N.)
Snadden, W. McN.
Watkinson, H.


Orr-Ewing, Ian L. (Weston-super-Mare)
Spearman, A. C. M.
Watt, Sir G. S. Harvie


Osborne, C.
Spence, H. R. (Aberdeenshire, W.)
Webbe, Sir H. (London)


Perkins, W. R. D.
Spins, Sir P. (Kensington, S.)
Wheatley, Major M. J. (Poole)


Peto, Brig. C. H. M
Stanley, Capt. Hon. R. (N. Fylde)
Williams, C. (Torquay)


Pickthorn, K.
Stevens, G. P.
Williams, Gerald (Tonbridge)


Pitman, I. J.
Steward, W. A. (Woolwich, W.)
Williams, Sir H. G. (Croydon, E.)


Powell, J. Enoch
Stewart, J. Henderson (Fife, E.)
Wills, G.


Prescott, Stanley
Stoddart-Scott, Col. M.
Wilson, Geoffrey (Truro)


Prior-Palmer, Brig. O.
Storey, S.
Wood, Hon. R.


Profumo, J. D.
Strauss, Henry (Norwich, S.)
York, C.


Raikes, H. V.
Stuart, Rt. Hon. J. (Moray)
Young, Sir A. S. L.


Rayner, Brig. R.
Summers, G. S



Redmayne, M.
Sutcliffe, H.
TELLERS FOR THE AYES:


Remnant, Hon. P.
Taylor, C. S. (Eastbourne)
Mr. Studholme and


Renton, D. L. M.
Taylor, W. J. (Bradford, N.)
Mr. T. G. D. Galbraith.


Roberts, P. G. (Heeley)
Teeling, William





NOES


Acland, Sir Richard
Cove, W. G.
Grenfell, D. R.


Adams, Richard
Craddock, George (Bradford, S.)
Grey, C. F.


Albu, A. H.
Crawley, A.
Griffiths, D. (Rother Valley)


Allen, A. C. (Bosworth)
Cripps, Rt. Hon. Sir S
Griffiths, Rt. Hon. J. (Lianelly)


Anderson, F. (Whitehaven)
Crosland, C. A. R.
Griffiths, W. D. (Exchange)


Attlee, Rt. Hon. C. R.
Crossman, R. H. S.
Gunter, R. J.


Awbery, S. S.
Cullen, Mrs. A.
Hale, J. (Rochdale)


Ayles, W. H.
Daggar, G,
Hale, Leslie (Oldham, W.)


Bacon, Miss A.
Daines, P.
Hall, J. (Gateshead, W.)


Baird, J.
Darling, G. (Hillsboro')
Hall, Rt. Hn. W. Glenvil (Colne V'll'y)


Balfour, A.
Davies, A. Edward (Stoke, N.)
Hamilton, W. W.


Barnes, Rt. Hon. A. J
Davies, Ernest (Enfield, E.)
Hannan, W.


Bartley, P.
Davies, Harold (Leek)
Hardman, D. R.


Bellenger, Rt. Hon. F.[...]
Davies, R. J. (Westhoughton)
Hardy, E. A.


Benson, G.
Davies, S. O. (Merthyr)
Hargreaves, A.


Beswick, F.
de Freitas, Geoffrey
Harrison, J.


Bevan, Rt. Hon. A. (Ebbw Vale)
Deer, G.
Hayman, F. H.


Bing, G. H. C.
Diamond J.
Henderson, Rt. Hon. A. (Rowley Regis)


Blackburn, A. R.
Dodds, N. N.
Herbison, Miss M.


Blenkinsop, A.
Donnelly, D.
Hewitson, Capt. M.


Boardman, H.
Donovan, T. N.
Hobson, C. R.


Booth, A.
Driberg, T. E. N.
Holman, P.


Bottomley, A. G.
Dugdale, Rt. Hon. J. (W. Bromwich)
Holmes, H. E. (Hemsworth)


Bowden, H. W.
Dye, S.
Houghton, Douglas


Bowles, F. G. (Nuneaton)
Ede, Rt. Hon. J. C.
Hoy, J.


Braddock, Mrs. E. M.
Edwards, John (Brighouse)
Hubbard, T.


Brockway, A. Fenner
Edwards, Rt. Hon. N. (Caerphilly)
Hudson, J. H. (Ealing, N.)


Brook, D. (Halifax)
Edwards, W. J. (Stepney)
Hughes, Emrys (S. Ayr)


Brooks, T. J. (Normanton)
Evans, Albert (Islington, S. W.)
Hughes, Hector (Aberdeen, N.)


Broughton, Dr. A. D. D.
Evans, E. (Lowestoft)
Hughes, Moelwyn (Islington, N.)


Brown, George (Belper)
Evans, S. N. (Wednesbury)
Hynd, H. (Accrington)


Brown, T. J. (Ince)
Fernyhough, E.
Hynd, J. B. (Attercliffe)


Burke, W. A.
Field, Capt. W. J.
Irvine, A. J. (Edge Hill)


Burton, Miss E.
Finch, H. J.
Irving, W. J. (Wood Green)


Butler, H. W. (Hackney, S.)
Fletcher, E. G. M. (Islington, E.)
Janner, B.



Follick, M.
Jay, D. P. T.


Callaghan, James
Foot, M. M.
Jeger, G. (Goole)


Carmichael, James
Forman, J. C.
Jeger, Dr. S. W. (St. Pancras, S.)


Castle, Mrs. B. A.
Fraser, T. (Hamilton)
Jenkins, R. H.


Champion, A. J.
Freeman, J. (Watford)
Johnson, James (Rugby)


Chetwynd, G. R,
Freeman, Peter (Newport)
Johnston, Douglas (Paisley)


Clunie, J.
Gaitskell, Rt. Hon. H. T. N
Jones, D. T. (Hartlepool)


Cocks, F. S.
Ganley, Mrs. C. S.
Jones, Frederick Elwyn (West Ham, S.)


Coldrick, W.
Gilzean, A.
Jones, Jack (Rotherham)


Collick, P.
Glanville, J. E. (Consett)
Jones, William Elwyn (Conway)


Collindridge, F.
Gooch, E. G.
Keenan, W.


Cook, T. F.
Greenwood, A. W. J. (Rossendale)
Kenyon, C.


Cooper, G. (Middlesbrough, W.)
Greenwood, Rt. Hn. Arthur (Wakefield)
Key, Rt. Hon. C W.







King, H. M.
Neal, H.
Summerskill, Rt. Hon. Edith


Kinghorn, Sqn.-Ldr. E.
Noel-Baker, Rt. Hon. P. J
Sylvester, G O.


Kinley, J.
Oldfield, W. H.
Taylor, H. B. (Mansfield)


Kirkwood, Rt. Hon. D.
Oliver, G H
Taylor, R J. (Morpeth)


Lee, F. (Newton)
Orbach, M.
Thomas, D. E. (Aberdare)


Lee, Miss J. (Cannock)
Padley, W. E.
Thomas, George (Cardiff)


Lever, L. M. (Ardwick)
Paling, Rt. Hon. Wilfred (Dearne V'lly)
Thomas, I. O. (Wrekin)


Lever, N H. (Cheetham)
Paling, Will T. (Dewsbury)
Thomas, I. R. (Rhondda, W.)


Lewis, A. W. J. (West Ham, N.)
Pannell, T. C.
Thorneycroft, Harry (Clayton)


Lewis, J. (Bolton, W.)
Pargiter, G. A.
Thurtle, Ernest


Lindgren, G. S.
Parker, J.
Timmons, J


Lipton, Lt.-Col. M.
Paton, J.
Tomlinson, Rt. Hon. G


Logan, D. G.
Peart, T. F.
Turner-Samuels, M.


Longden, F. (Small Heath)
Poole, Cecil
Usborne, Henry


McAllister, G.
Popplewell, E
Vernon, Maj. W. F


MacColl, J. E.
Porter, G
Viant, S. P.


McGee, H. G.
Price, M. Philips (Gloucestershire, W.)
Wallace, H. W.


McGovern, J.
Proctor, W. T
Watkins, T. E


McInnes, J.
Pryde, D. J.
Webb, Rt. Hon. M. (Bradford. C.)


Mack, J. D.
Pursey, Comdr. H
Weitzman, D.


McKay, J. (Wallsend)
Rankin, J.
Wells, P. L. (Faversham)


Mackay, R. W. G. (Reading, N.)
Rees, Mrs. D.
Wells, W T. (Walsall)


McLeavy, F
Reeves, J.
West, D. G.


MacMillan, M. K. (Western Isles)
Reid, T. (Swindon)
Wheatley, Rt. Hn. John (Edinb'gh, E.)


McNeil, Rt. Hon. H.
Reid, W. (Camlachie)
White, Mrs. E. (E. Flint)


MacPherson, Malcolm (Stirling)
Rhodes, H.
White, H. (Derbyshire, N. E.)


Mainwaring, W. H.
Richards, R
Whiteley, Rt. Hon. W


Mallalieu, E. L. (Brigg)
Robens, A.
Wigg, George


Mallalieu, J. P. W. (Huddersherd, E)
Roberts, Goronwy (Caernarvonshire)
Wilkes, L.


Mann, Mrs. J.
Robertson, J. J. (Berwick)
Wilkins, W. A.


Manuel, A. C.
Robinson, Kenneth (St. Pancras, N.)
Willey, F. T. (Sunderland)


Marquand, Rt. Hon. H. A
Rogers, G. H. R. (Kensington, N.)
Willey, O. G. (Cleveland)


Mathers, Rt. Hon. George
Ross, William ([...])



Mellish, R. J.
Royle, C.
Williams, D. J. (Neath)


Messer, F.
Shackleton, E. A. A.
Williams, Ronald (Wigan)


Middleton, Mrs. L
Shinwell, Rt. Hon. E.
Williams, Rt. Hon. T. (Don Valley)


Mikardo, Ian
Shurmer, P. L. E.
Williams, W. T. ([...], S.)


Mitchison, G. R
Silverman, J. (Erdington)
Wilson, Rt. Hon. J. H. (Huyton)


Moeran, E. W.
Silverman, S. S. (Nelson)
Winterbottom, I. (Nottingham, C.)


Monslow, W.
Simmons C. J.
Winterbottom, R. E. (Brigtitside)


Moody, A. S.
Slater, J.
Wise, Major F. J.


Morgan, Dr. H. B
Smith, Ellis (Stoke, S.)
Woodburn, Rt. Hon A,


Morley, R.
Snow, J. W.
Woods, Rev. G. S.


Morris, P. (Swansea, W.)
Sorensen, R. W.
Wyatt, W L.


Morrison, Rt. Hon. H. (Lewisham, S.)
Soskice, Rt. Hon. Sir F
Yates, V. F.


Mort, D. L.
Steele, T.
Younger, Hon. Kenneth


Moyle, A.
Stewart, Michael (Fulham. E)



Mulley, F. W
Stokes, Rt. Hon. R. R
TELLERS FOR THE NOES:


Murray, J. D
Strachey, Rt. Hon. J.
Mr. Pearson and Mr. Sparks.


Nally, W.
Strauss, Rt. Hon. G R (Vauxhall)

New Clause.—(REDUCTION IN RATES OF PURCHASE TAX.)

The following new Clause stood on the Order Paper in the name of Mr. LYTTELTON:
(1) Subsection (2) of section twenty of the Finance Act, 1948 (which provides that in Part I of the Eighth Schedule of that Act the words "First," "Second," and "Third" indicate the first, second and third rates of purchase tax which are respectively one-third, two-thirds and one hundred per cent. of the wholesale value of the goods), shall have effect as if the words "one-quarter" were substituted for the words "one-third," the words "one-half" were substituted for the words "two-thirds," and the words "four-fifths" were substituted for the words "one hundred per cent.
(2) The Treasury may by regulations provide for mitigating the financial loss to persons who own goods for the purpose of resale where purchase tax has become chargeable in respect of those goods prior to, and at a rate higher than that applicable by reason of the reductions set out in subsection (1) hereof.

(3) Regulations under subsection (2) may contain incidental and supplementary provisions and may in particular provide—

(a) for defining the classes of persons qualifying for payments;
(b) for computing the quantity of goods of any description in respect of which payments are to be made;
(c) for paying, to those persons and in respect of those goods, out of sums received by the Commissioners of Customs and Excise on account of purchase tax, the excess of tax at the rate which was chargeable in respect of those goods over tax at the rate subsequently chargeable in respect of goods of the same description by reason of a change in the classes of chargeable goods or in the rate of tax applicable to them;
(d) for requiring, as a condition precedent to receiving payment in respect of any goods, an undertaking from the recipient that he has reduced the price at which he offers for sale goods of the same description by an amount not less than that by which the tax chargeable in respect of goods of that description has been reduced;


(e) for the imposition of penalties in respect of any contravention of or failure to comply with the regulations, so, however, that no person shall by virtue of this paragraph be liable for any offence to imprisonment for a term exceeding twelve months or to a fine exceeding five hundred pounds.
(4) This section shall be construed as one with Part V of the Finance (No. 2) Act, 1940.

The Chairman: With regard to the proposed new Clause in the name of the right hon. Member for Aldershot (Mr. Lyttelton), I think I should say at once that in my view only subsection (1) is in order, namely, that dealing with the question of a change in the rates. If the right hon. Gentleman desires to move the proposed new Clause in that form I shall be happy to call it.

Mr. Selwyn Lloyd: With great respect, may I make a submission to you, Major Milner, with regard to that matter? As you have indicated, subsection (1) deals really with the rates of Purchase Tax, but subsections (2) and (3) deal with certain methods which may be adopted with regard to administering any adjustments which might be made as a result of subsection (1). My submission to you, with great respect, is that it would be clearly in order to discuss the method of administering any reductions when we are discussing a Clause which deals with reduction. If I might remind you of the form of the Budget Resolution, it said:
That it is expedient to amend the law with respect to the National Debt and the public revenue, and to make further provision in connection with finance, so, however, that this Resolution shall not extend to the making of amendments of the law relating to purchase tax except amendments, if any, reducing the first, second, or third rate of the tax generally for all goods to which the rate applies.
I respectfully agree with you that if you were to say that any subsection dealing with Amendments to the general law of Purchase Tax would be out of order, but my submission is that subsections (2) and (3) are directly related to any reductions which may be made under subsection (1).
Although I quite appreciate that this is in no way binding on the Chair, because it is a matter for the Chair, I would point out that this point was referred to on 21st April, when my right hon. Friend the Member for Bristol, West (Mr. Stanley) asked the Chancellor in regard to this matter, and I myself put a question to the Chancellor on the administration of any

reductions which might be made. The right hon. and learned Gentleman was good enough to say that, as far as the Government were concerned, they had no objection to that matter being raised. Of course, that does not bind the Chair on a question of order, but I do not think there would be any resistance from the Government Front Bench to this matter being raised. It is a matter of great importance that questions of Purchase Tax reductions and administration should be discussed in this Committee, and I therefore submit, with great respect, that a discussion on subsections (2) and (3) should be allowed.

The Chairman: I am obliged to the hon. and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd) for putting this case so clearly. I am, of course, bound by the Budget Resolution, which says quite clearly—
… this Resolution shall not extend to the making of amendments of the law relating to purchase tax, except amendments, if any, reducing the first, second or third rate of the tax
and so on. In my view, the first subsection comes properly within the exception in the last three lines of the Budget Resolution, in that it is an Amendment proposing to reduce the first, second or third rate of tax. The remainder of the new Clause, however, in my view, is out of order, because it goes beyond the Budget Resolution. If the Budget Resolution intended that subsections (2) and (3), for example, might be properly moved, then the Resolution, in my view, would have used some such words as "consequential thereon" or "incidental thereto." No such words are used, and I am bound by the terms of the Budget Resolution. In my view, that Resolution binds the Chair and the Committee, and limits Amendments to the reduction, or rather the changing, of the first, second or third rates of tax. In these circumstances, whilst fully appreciating the importance of the matter and the submission which the hon. and learned Gentleman has made, I am afraid I am bound to rule that only the first subsection is properly in order.

Mr. Selwyn Lloyd: Would you care to hear a further point in regard to this matter, Major Milner? As I understand it, your view is that it is impossible to discuss any method of reduction unless there are the words "and matters


relating thereto" in the Budget Resolution. That would really mean that the Budget Resolution would be completely nugatory, because it is quite impossible to pass a Clause dealing with reductions of Purchase Tax without any reference at all to the methods by which those reductions are to be made. I should have thought it ought to be implied in the word "reduction" that there should also be discussed the method of reduction. With great respect, Major Milner, I do not think it is going very far, and I should have hoped it was the desire of the Committee, if possible, to discuss this matter, and that you would have found it possible to rule these two subsections in order, because they are definitely related to subsection (1).

9.15 p.m.

Mr. Messer: Is there any onus on the Chairman to give any justification for his Ruling?

The Chairman: In reply to the last hon. Member, when an Amendment is ruled out of order and it is not merely a case of non-selection, it is not uncommon to advance reasons when requested, and I always endeavour to do so. Whilst again fully appreciating all that the hon. and learned Gentleman has said, I am afraid I cannot depart from my Ruling. It seems quite clear to me that any such proposal, even though limited to method, would be an amendment of the law relating to Purchase Tax and this particular Resolution has, no doubt, been so drawn, I imagine—although I have no authority for saying so—in order that discussion should be limited. That being so, I am afraid I must rule that only the first subsection of the new Clause is in order.

New Clause.—(REDUCTION IN RATES OF PURCHASE TAX.)

(1) Subsection (2) of section twenty of the Finance Act, 1948 (which provides that in Part I of the Eighth Schedule of that Act the words "First," "Second," and "Third" indicate the first, second and third rates of purchase tax which are respectively one-third, two-thirds and one hundred per cent. of the wholesale value of the goods), shall have effect as if the words "one-quarter" were substituted for the words "one-third," the words "one-half" were substituted for the words "'two-thirds," and the words "four-fifths" were substituted for the words "one hundred per cent."—[Mr. Lyttelton.]

Brought up, and read the First time.

Mr. Lyttelton: I beg to move, "That the Clause be read a Second time."
Within the limitations of your Ruling, Major Milner, I will endeavour to present the new Clause to the Committee. We have seen, in an earlier part of the Debate upon Purchase Tax on commercial vehicles, how far that tax has now been spread. It is well, I think, at the outset of this Debate, to look at its history and to remember that it originated as a check to consumer buying and as an anti-inflationary measure during war-time. The intended application of the tax at that time has now been widely departed from, as also from the general conception which brought it into being.
This year it has, first of all, been used as a tax upon capital goods and upon the tools of industry, because that is what commercial vehicles are. The tax has spread far away from those articles which are considered to be not indispensable—I apologise for the double negative—and the tax is now levied upon many absolute necessities, or, at best, upon goods which are semi-necessities. If proof were needed that this tax is spreading, it would be found by looking at the yield. In 1941, the yield was £97 million, and it has risen to £303 million in 1950. It is thus a very important source of revenue, but we hold that it is an objectionable tax, at least in its present form, as a permanent part of the fiscal system.
Many of the original classifications, as I shall show are arbitrary—I might almost say wayward—and much of the original object in curbing spending on luxuries has been lost sight of in the desire for revenue. I hesitate to embark on any definition of what is a luxury, because luxury spending was what the tax was originally designed to prevent, and I toyed with the idea of saying that a luxury was something which was unnecessary. But I realise that under that heading would fall many Departments of State, and, as I want to persuade and not to annoy, I drop that idea altogether and turn to the Oxford Dictionary. Shortly, it defines luxury as
The habitual use of or indulgence in what is choice or costly.
The compilers of that great work from the University, which was the nurse of so many right hon. Gentlemen on the Treasury Bench, would have been


shocked to discover what is now defined as a luxury. I will say something later about why I do not consider that soap—even taking into account the heterodox view of the Minister of State—or toothbrushes, razor blades, dusters or face cloths fall within this class. In the course of defence of this tax, the Financial Secretary to the Treasury said in the Budget Debate that the abolition of the Purchase Tax would reduce the cost of living index only by about a point, or 1.1 per cent.—I forget which. That is merely another means of saying that the cost-of-living index is not a very good guide to the true cost of living. Indeed, that is so.
I was interested to see in the report of the E.C.A. mission upon the British economy, which, I think, contains some brilliant research with some of which I do not agree, that every family of about four persons earning less than £10 a week and representing about 80 per cent. of the population, pays about 4s. 6d. a week in Purchase Tax. This seems to me to focus, in a better way than a statistical index, the effects upon the consumer of the imposition of this tax.
The estimated receipts from Purchase Tax under the three categories, are, of course, very different. There are £42½ million for the 100 per cent. rate, £43½ million for the 66⅔ rate, and no less than £217 million on are 33⅓ per cent. rate.
I want to deal with these categories in turn. I realise that we are under some Parliamentary difficulties in this matter, Parliamentary difficulties which have not yet been resolved satisfactorily for Members in all parts of the Committee. I will try to make illustrations rather than descend into detail. I trust I shall be successful in keeping in order. My object is to show, first of all, the very severe effect upon the consumer. Then, I want to show the arbitrary, and sometimes ridiculous, incidence of the tax. When I have done that, I shall proceed to the other, very substantial point, which is the effect of Purchase Tax upon our exports market and the drag and deterrent which it exercises against the production of high quality goods.
In the 100 per cent. group, admittedly, the original objects of the tax are much more readily discernible, but the yield is only about one-seventh part of the general

tax. Under this heading of 100 per cent. tax I pick out cosmetics, lipsticks, powder and perfume. I realise that on this subject I am on extremely delicate ground, but lipstick and face powder seem to me, with to-day's social habits, at least a semi-necessity. On this occasion I feel I am certainly on the side of the angels. I am: glad to see the hon. Lady the Member for Blackburn, East (Mrs. Castle) nodding her head at this point. [An HON. MEMBER: "And in a white dress, too."]
Perhaps I should agree that women might have to pay some tax for making themselves look more attractive than Nature would otherwise permit, but to tax lipstick and face powder at 100 per cent. is carrying the Crippsian asceticism much too far. To use in the favourite Treasury phrase, a powerful fiscal weapon of this kind in favour of shining noses is, like so much Socialist doctrine, already long ago obsolete.
I do not want to touch on perfumes for more than one moment, except to remind the Committee that a well-known American firm, who were passing from the manufacture of soap to that of perfume, offered a large prize to anybody who could provide them with a suitable slogan. They awarded the prize, though they did not use the slogan, to a man who invented this: "If you don't use our soap, for heaven's sake use our perfume." Soap is already in the 33⅓ per cent. category.
I want to refer to the matter of furs, although I agree that this is a most unsuitable time of the year in which to do so. It is admittedly a luxury trade, but I am advised from many sources that the trade is running into serious difficulties because the home market has been cut off from it as a result of Purchase Tax. The trade makes a very important contribution to our exports, and some relaxation—I think a fairly large relaxation—of the Purchase Tax is necessary if we are to continue to be a large exporter of high grade fur goods. We have to face the stark fact that some ladies may get away with being able to buy a fairly cheap fur coat at a much lower rate of Purchase Tax—a horrible idea—in order that the export trade may be kept alive in furs.
I now turn to leather goods, and I will not develop this part of the argument


very much because one or two of my hon. Friends have very detailed knowledge of the subject. All articles made of leather, like ladies' handbags and suitcases, are subject to 100 per cent. Purchase Tax on the wholesale price, and manufacturers are further mulcted by between 10 per cent. and 25 per cent. if the goods are sold direct to retailers, which, I am advised, is the almost universal custom in this trade. I think that a handbag or a suitcase falls entirely within the definition of what is indispensable. I am not sure whether or not I detected the hon. Member for Blackburn (Mrs. Castle) nodding, but I go so far as to say that they are indispensable.

Mrs. Castle: It would entirely depend on what the handbag is made of. A leather one is not indispensable.

Mr. Lyttelton: But leather is much the best material out of which to make a handbag. I know that I shall carry the hon. Lady with me there.
Our position in this leather goods trade has always been pre-eminent. In olden days English saddlery was sought the world over, and since then one of the things which the tourist and traveller in this country goes for straight away are high grade leather goods which are made by the unique skill of our craftsmen in this industry. We must be very careful, in imposing this swingeing rate of Purchase Tax, that we do not kill a most useful export industry.
Now I turn to the 66⅔ per cent. range, and I want particularly to refer to the case of woollen and worsted cloth. The rate of tax on non-utility cloth—this is one of the first instances I shall give of the volatile nature of the policy of His Majesty's Government in this matter—was increased from 33⅓ per cent. to 50 per cent. in October, 1947, and to 66⅔ per cent. in the Budget of 1950. I am advised that this tax is having an effect little short of disastrous on this important export industry. The collapse of demand at home as a result of the tax did not really make itself felt until three or four months ago, and now the shrinking home market has made it very difficult for the manufacturer to make the cloths that are required for our export trade.
I do not wish to labour the point, but it is familiar to all Members of the Committee that we shall not get a satisfactory export of this type of special textile unless the manufacturer is permitted some home market. If he is not, he has to bear the entire risk of export himself. It is more difficult to gauge demand abroad than it is at home, and, owing to the incidence of this tax, he has been asked to take all the risks and to be in danger of not even covering his overhead expenses on these special textiles, which should be one of the fruitful sources of earning foreign exchange for our country.
9.30 p.m.
I must worry the Committee with figures to show how the amount of Purchase Tax has affected a length of cloth. That has come about not only by the incidence of Purchase Tax, although that is very heavy, but also by devaluation and the consequent rise in the price of wool. In January, 1946, the cost of 33½ yards—that is a single garment length, I believe—was £6 6s., of which Purchase Tax, at 33⅓ per cent., represented £1 11s. 6d. In March, 1948, the price had risen to £9 12s. 10d., of which Purchase Tax, at 50 per cent., represented £3 4s. 3d.; in February, 1950, it had risen to £12 10s. 10d., of which Purchase Tax represented £5 0s. 4d. Thus, while the cost of the material had risen by 60 per cent., the amount of tax had risen by over 300 per cent. I have seen estimates that by the end of this year the total cost will have risen to £14 11s. 8d., of which Purchase Tax will be £5 16s. 8d. This is one of the things which shows how carefully the cost-of-living index must be related to the cost of living.
These figures seem to me to be fantastic, and they have their effects upon the consumer. In addition, they make it impossible to develop high grade textiles without the support of a continual home market. I am informed—and I hope the Treasury Bench will give us some information on the subject—that revenue is falling very sharply from this source. I suggest most strongly that the time has come for the Government to revise the incidence of this tax.
I also want to refer to the exhilarating subject of gas water heaters, and I can do so with all the more force because I


am connected with the electrical competitive industry. The point I want to make is about the volatile rate of tax, and when the Committee have heard these figures they will agree that my description is not exaggerated. The tax was originally 33⅓ per cent. in 1940; was withdrawn in October, 1945; reimposed at 66⅔ per cent., or double, in April, 1947; increased in November, 1947, to 75 per cent.; in April, 1948, to 100 per cent.; and reduced in June, 1948, to 66⅔ per cent. If this is not an example of an infirmity of purpose I do not know what is. How is it possible for management, traders and shopkeepers to deal efficiently in business, when a tax goes up like the temperature chart of a man suffering from delirium tremens. It is quite ridiculous.
Under this rate of 66⅔ per cent. are some essential processing materials, which seems to be as clearly out of place in this particular category as does the Purchase Tax on commercial vehicles. A roll of tapers' flannel, which is material covering the drying cylinders of the sizing equipment in weaving, costs £88 17s. 6d., of which the Purchase Tax is £56 5s. 9d. I suppose the idea of this tax is that women, who have actually been put off by 100 per cent. tax on lipstick, will turn in disgust from ordinary materials and use tapers' flannel as a form of evasion if there were no such tax. I really suggest that the black market in tapers' flannel as a form of women's clothing is unlikely to be very great even in our Socialist society of 1950. At any rate, I recoil from the whole subject which, I think, rather repulsive, and suggest that tapers' flannel is a material which is part of the material of industry, and should not attract tax at this very high rate.
Then, again, the difference between utility and non-utility goods has become almost impossible to distinguish. For example, utility towels, if they are available, are retailed at 3s. 7½d. and exactly identical towels, which are described as non-utility, cannot be sold at less than 6s. 11d. I am informed that experts cannot tell the difference, and I do not know how the ordinary customer is to begin to do it. Then there is the plain white towel, which costs 4s. 9½d. because it is utility. If it were subjected to some simple dyeing process, which

costs practically nothing, it becomes non-utility and sells at 10s. 6d.
Lastly, and the only other instance I want to give of the 66⅔ per cent. tax on all non-utility furnishing materials. I apologise for the terminology, which is not mine, but in many cases the tax inflicts vexation and hardship upon the housewife. I have an example of a lady who bought printed linen at 11s. 8d. a yard for curtains at a time when the fabric was in the utility range. For some fitful reason it came out of the utility range, and when she went to buy some more of the same material to cover some chairs the price was 21s. 6d.—for exactly the same thing. It seems very difficult to understand.
Now I turn to the 33⅓ per cent. range. I want very politely to issue a warning to hon. Members opposite. If they vote against this Clause I intend to make quite clear—and so will my hon. Friends—exactly what are the effects of their vote. It will be a vote against reducing the Purchase Tax on a number of absolutely essential articles and upon a number of others which I regard as semi-necessities. Let me make perfectly clear what they will be doing. We know from the "Daily Herald"—those of us who read it—what the defence of this tax is—that it is a tax on luxury goods. That is what it is asserted to be. But this 33⅓ per cent. tax is levied upon many things which appear to me to be absolute necessities—soap, washing boards, sponges, scissors, sewing machines, and stationery. It is levied on cutlery, knife boards, razor blades, pencils, toothbrushes.
In this connection toothbrushes happen to fall into the same category as eyebrow brushes, which I should not mind attracting a little tax. Moreover, I do not pretend that animal toilet combs including nit combs, should not be subject to tax, but I do take leave to take a strong line about the taxation of toothbrushes. To say they are a luxury, and that it is right to deter the consumer, in an anti-inflationary drive, from buying a new toothbrush, is reducing economic policy to a farce. Nor, if I may come to my own industry, do I think that electric bulbs, electric lamps, or meat covers for that matter, fall into the same category as nit combs, animal combs, and eyebrow brushes. There, I do not follow


the right hon. and learned Gentleman—perhaps because I do not keep fully in touch with Fabian thought at the moment.
I cannot go into the cases of all the anomalies, but I think I must make a special reference to the tax on stationery, because that tax has a direct bearing on all those carrying on business of all kinds. Alas that it should be so, but it is; and the Government themselves are some of the chief users. We have so many things to fill in now that paper is becoming one of the principal raw materials of British industry. I think hon. Members must know that if this tax were reduced on stationery there need not necessarily be very much loss of revenue because, so far, stationery used for commercial undertakings is chargeable to revenue and there would be more taxable profits. But there are also many anomalies in stationery. Any registered trader can buy paper in bulk and himself print it on duplicating machinery and escape the tax.
If hon. Members opposite vote against this Clause 1 shall make use of their vote, and shall show that they voted against a reduction in the case of these articles which, I think, all of us in our non-political moments—as when we are using our toothbrushes and wearing our pyjamas—would really allow are absolute necessities.
I shall not keep the Committee for more than a minute or two longer, but I wish to turn back to the important subject of exports and to the effect of the tax upon industry The whole effect of the Purchase Tax under any of the three categories is a blow to the production of quality goods. That is the nature and the excuse for the tax. It is unnecessary to discuss again whether quality goods may justly be described in certain cases as luxuries but those who have studied the export trade closely would, I think, agree with the general proposition that the development of primary and secondary industries among many of our overseas customers—I mean industries like cotton spinning and weaving in Brazil, the steel industry in Australia and the attempted industrialisation of the Argentine and the manufacturing industries of Japan and India—is a modern development. I think that it is almost

universally agreed that we must look more and more for increases in our export trade to high quaility goods.
This tax, from the nature of it, falls upon this very class of article, and in no market does that apply with more force than in the United States, the very arsenal of manufacturing goods in the world. Nevertheless, there is still a market there for the higher quality products produced by our workpeople in this country, who certainly have no superiors, even if they have any equals, for skill in the world. I am sure it is true, and I am sure that Ministers have often said it at other times, that we must look to high quality goods for the most fruitful source of our increased exports. I say with every sense of responsibility that the effect of Purchase Tax is to drive our manufacturers away from developing those high quality products—I have textiles particularly in mind, like Yorkshire cloth—which alone can penetrate and hold markets where the demand for high quality goods has been so firmly established.
The incidence of this tax is arbitrary and fitful. I have given only a few examples and they are quite indefensible. The Government has departed far from the original idea of the tax, which falls unjustly between one commodity and another and between one category of goods and another. Sometimes it falls upon the same commodity at different times in a very different way, and it is imposed sometimes upon the productive part of the industry. It must be a deterrent to the production of high quality goods and a handicap to the development of our export trade in them.
Lastly, it falls very hard upon the consumer and leads to a direct increase in the true cost of living, whatever the statisticians say. It includes within its grasp many things which only a jaundiced imagination could possibly describe as other than indispensable. Is it really an anti-inflationary measure to try to deter people from buying soap and toothbrushes? For all those reasons we regard the time long past when this tax should be drastically reduced as to its incidence. It is urgent that the rate of tax should be reduced in the way in which we suggest in our proposed new Clause.

Mr. David Eccles: I am particularly glad to be able to support the


proposed new Clause which my right hon. Friend has moved. He began by saying that the origin of the tax was a war-time necessity to mop up purchasing power. We think the time has come when a general reduction should be made in it. I would stress the general nature of our new Clause because we think the whole tax requires modifying and reducing. The remarks I propose to make will be addressed not to particular instances but to the general rates of the whole tax.
9.45 p.m.
During the autumn Budget Debates in 1945, the then Chancellor of the Exchequer, who is now the Minister of Town and Country Planning, said this:
We must go very slow in remitting Purchase Tax on anything just now, because all remissions … release purchasing power … but … as we go forward into a period of greater production and abundance, this argument for maintaining the Purchase Tax will lose much of its force."—[OFFICIAL REPORT, 19th November, 1945; Vol. 416, c. 140–1.]
Three years later the same right hon. Gentleman said:
I always took the view that Purchase Tax ought to be gradually, but not rapidly, reduced."—[OFFICIAL REPORT, 7th April, 1948; Vol. 449, c. 197.]
His party were behind him, as I believe they are now when he talks about isolation. They were behind him when he said that Purchase Tax ought to be reduced as more production came forward and more goods came into the shops. This intention was, in our belief, sound, and had it been followed it would have done something to offset the rise in the cost of living, but it has very clearly been abandoned because Government expenditure has risen to such heights that every source of revenue has now to be squeezed to the full.
My right hon. Friend has shown that the retention of this tax will harm the export trade. We are slowly learning that the problem of the balance of payments and our domestic policies cannot be kept in watertight compartments. To maintain a tax which increases the cost of living and stimulates wage demands is likely to damage our competitive powers, and, similarly, to maintain a tax which discourages the production of goods which we can sell
abroad must certainly have the same damaging effect. These evils can be illustrated by example. They are quite sufficient argument for the new Clause.
I want to deal with another and broader aspect of Purchase Tax which the Committee has neglected for too long. In years gone by there were tremendous debates in the Committee on the relative merits of direct and indirect taxation. Socialist hon. Members will remember that before they came to power they always argued against indirect taxation because it is regressive. If we want to collect a large sum by indirect taxes, we have to select certain widely consumed articles knowing that the expenditure on those articles will take a larger proportion of the budget of the poor man than of that of the rich man. "Indirect taxation is a violation of every just and sound principle," said Mr. Snowden, and he said it many times. It was not a peculiarly Socialist view. Dr. Johnson, a stout Tory, defined "excise" in his dictionary as, "a hateful tax upon commodities." The word "hateful" is the word I commend to the Committee.
When we come to Mr. Gladstone's time we find that he held that a Chancellor ought to be impartial as between direct and indirect taxation, and in his Budget speech of 1862 he used words which have become classical on this subject. He said:
I never can think of direct and indirect taxation except as I should think of two attractive sisters who have been introduced into the gay world of London, each with an ample fortune, both having the same parentage—differing only as sisters may differ, as where one is of lighter and another of darker complexion, or where there is some variety of manner, the one being more free and open, and the other somewhat more shy and retiring and insinuating. I cannot conceive any reason why there should be any unfriendly rivalry between the admirers of these two damsels; and I frankly own, whether it be due to a lax sense of moral obligation or not, that as a Chancellor of the Exchequer, if not as a Member of this House, I have always thought it not only allowable, but even an act of duty, to pay my addresses to them both. I am, therefore, as between direct and indirect taxation, perfectly impartial.
If my right hon. Friend will allow me to cast a small stone at his great uncle, I think that great statesman cannot have had much experience of the result of paying equal attention to two sisters with their unrivalled opportunities for comparing notes.
It has always appeared to me that this impartiality between the two forms of taxation was a mystical rather than a rational proposition. Mr. Lloyd George


took a sensible view of the matter when he said:
All should give, as in a church, but according to their means. They all have an interest in the State.
When in a Committee of this House in 1911 Mr. Lloyd George was speaking on the food taxes, he said:
You must not have a class with great political power which did not pay any taxes.'
That is the justification for having some indirect taxation—everyone should pay something—but what matters is that the total taxation levied upon an individual should be in proportion to his ability to pay. I think that is the modern principle. But Socialists like Mr. Snowden did not hold this view. They said that the whole of taxation ought to be direct taxation because only direct taxation can be controlled and made precisely in proportion to the income and wealth of the taxpayer.
Further, of course, the large family pays more in Purchase Tax than the single man or the childless couple. Purchase Tax is not only regressive—falling more heavily as it descends the income scale—but it is also what is called horizontally regressive—falling more heavily the larger is the family. It is interesting to recall that the right hon. Gentleman who is now the Minister of Town and Country Planning, when he was a writer on economics, took a strong view about taxes of the kind we are now discussing. He thought they were bad because the taxpayer did not notice what he was paying. Lord Stamp referred to this view in a book published in 1924, familiar I expect to all hon. Members. He there wrote:
'Dr. Dalton has said that in a strictly honest State he "—
that is, the taxpayer—
ought to be told when he was purchasing one of these articles that so much was the price of the article and so much was the tax due to the State.
I do not think the Purchase Tax would last long if the advice of the right hon Gentleman was taken and the tax was tacked on to every article—[An HON. MEMBER: "Everybody knows it."]—for instance, on every packet of cigarettes. Lord Stamp continued as follows in what I consider to be a striking passage:
But part of the whole virtue of indirect taxation is its silent character. This being so, the man, of course, is kept in a kind of childish

attitude towards the results of taxation, and the object of State expenditure. It is a more advanced stage when the State has the pluck to go to him and tell him like a grown man what the sum is that he owes to the State, and what it is for. He then knows that all the collective operations of society cost money, and how much they cost, and takes a far more personal and direct interest in that great power of governing which has been now committed to his hands.
That is a good argument. The argument there is that a progressive Government would steadily shift the sources of taxation from things to persons.
What have the Labour Government been doing in this respect? If we take indirect taxation as a proportion of the total revenue raised, we find that in 1945–46 it was 36 per cent.; in 1946–47, 38 per cent.; in 1947–48, 40 per cent.; in 1948–49 and 1949–50, 41.5 per cent.; and in the present Budget for 1950–51, 43.3 per cent. There is a steady shift under Socialist administration towards taking more and more of the Revenue in indirect taxes, and in the Budget that is now before the Committee the Government actually boast that they have found the money to reduce Income Tax by increasing two of the indirect taxes—the Petrol Duty and the Purchase Tax upon lorries.
There is a very serious matter of principle here.

Mr. Ellis Smith: Who made the boast?

Mr. Eccles: It has been done from the Treasury Front Bench all the time. They said that these two taxes are linked one with the other and that if we voted for the Income Tax reduction we must necessarily link it with the new indirect taxes. I only wish to point out to the Committee that all the theories of the Socialists have been turned upside-down and that in practice, instead of reducing taxation, they increase indirect taxation
Of course, the party opposite have abandoned, along with so many of their other ideals—internationalism, for example—the brave and human principle of making taxation fair, understandable and conducive to that sense of individual responsibility without which a modern democracy will degenerate into some kind of totalitarianism. In power we see that Socialists prefer things to persons. This is just one more proof of how the individual


and the family, who are the true objects of civilisation, are disregarded by the centralising State with its exorbitant expenditure and its ruthless pressure to extract the means to pay.
I take a different view of the purpose of society. I believe that all our institutions—and taxation is one of the most powerful and pervading—should be directed to building up the character and the sense of responsibility of the people. I am on the side of Dr. Johnston—I think that this is a hateful tax; and therefore, I would add this moral and social principle to the sound economic arguments for asking the Committee to insert this Clause in the Bill.

Mrs. Castle: The right hon. Member for Aldershot (Mr. Lyttelton), who moved the. Second Reading of the Clause, started his speech in the rôle of a siren, offering blandishments to the womenfolk by his references to cosmetics, handbags, and those little trifles which are supposed to ensnare the wayward woman's heart.

Mr. Eccles: Our hearts, not yours.

Mrs. Castle: With handbags? The right hon. Gentleman concluded by a threat, in which he said that if Members on this side voted against his Motion, he would make it perfectly clear throughout the country that we were voting against reductions in taxation on certain very essential domestic articles. I intend to resist the blandishments, on the one hand, and I hope to retaliate in kind with a small threat of my own before I finish my speech.
Of course, it is obvious that no one in this Committee or in the country likes or enjoys Purchase Tax. Anyone who is in the Committee could make out a case—and it looks as though some hundred will attempt to do so in the next hour or so—against one form of Purchase Tax or another. It is perfectly easy, it is very good political propaganda, and I am sure it will be indulged in freely by hon. Members opposite. But, clearly, if we are responsible Members, who are really genuinely trying to do our best to lift the burdens from the backs of our people where they are heaviest and least justified, we cannot come to this wide range of Purchase Tax and pick out, piecemeal, one item here, and another there. [An HON. MEMBER: "Who is suggesting that?"]
10.0 p.m.
The right hon. Gentleman who moved the Motion was able to have a lot of fun with individual items and many of us can do it, but irrevocably what we have to bear in mind—and this is a point to which the right hon. Gentleman made no reference in his speech, I thought rather typically—is that if we carry this Motion tonight we shall lose in revenue, on my estimate—and I stand subject to correction by the Treasury spokesman—some £68 million—an item which will make a very big impression on our expenditure during the coming year.
I suggest to the housewives of this country, when they are judging this Debate, should not for one moment be ensnared by the belief that the right hon. Gentleman is really concerned with or thinking about their combs, or razor blades, or dusters—[Laughter.] I buy my husband's razor blades. They come out of the housekeeping items. The right hon. Gentleman has moved a Motion which would cost £68 million revenue which would force us into a corresponding reduction in expenditure elsewhere. We know that a favourite item of hon. Members opposite is food subsidies. [HON. MEMBERS: "Nuts."] It is not nuts.
The £68 million will not be absorbed by lifting the tax from these little homely articles about which so much play has been made tonight, because so successfully has this tax been graded and adjusted through the past few years by successive Chancellors of the Exchequer on this side of the House that in actual fact, as I hope to show the Committee in a moment or two, the total amount of revenue now raised by Purchase Tax on the simple, homely articles is quite small and only a fraction of the sum about which hon. Members opposite talk. [An HON. MEMBER: "Take it off."] But that is not what hon. Members opposite are asking.
We are being asked to vote on a Motion which would cost £68 million and that loss of revenue, as I will show, would not come from reliefs on these essential articles, substantially. If the Committee looks at this Motion and studies its practical effect, they will find that not only does it propose to reduce Purchase Tax on all rates, all categories, all groups of articles coming within the Purchase Tax range, but will reduce


taxation most on the least essential. In other words, it is a typically discriminatory Tory Motion in favour of the rich.
I will give the right hon. Gentleman an illustration, and here I retaliate in kind. If Members of the Committee vote for this Motion I propose to let the housewives of Britain know that what they are voting for is for a reduction in the wholesale price of such essentials as lino or wallpaper or mats for the floor—essential items for the home—of 1s. 8d. in the pound, for a reduction of the wholesale price of gramophone records of 3s. 4d. in the pound and for a reduction in the wholesale price of fur coats, jewellery and perfume of 4s. in the pound.

Mr. Lyttelton: Will the hon. Lady also tell the housewife that whereas £217 million is raised by the 33⅓ per cent. tax only £42 million is raised by the 100 per cent. tax?

Mrs. Castle: That does not really affect my argument. The fact that there are very few members of the community who are able to sport fur coats or perfumes does not alter my argument that it is the interests of that section of the community with which hon. Gentlemen are concerned.
The interesting effect of this Motion is that if we vote tonight for this form of reduction of Purchase Tax we shall be voting for the biggest saving for those who buy the least essential articles. All this talk we have had in these Debates on this Finance Bill about how the Chancellor has not done enough for the smallest income groups, how he has done nothing for the smallest income groups of all goes by the board and a reduction of £68 million in the food subsidies is offset by a reduction in these luxury items.

Mr. John Rodgers: Is the hon. Lady aware that the only reduction in tax which hon. Gentlemen opposite have made up to date has been on Rolls Royces?

Mrs. Castle: Yes, and it was warmly welcomed by hon. Gentlemen opposite.
I suggest that in a situation of this kind, in which austerity and sacrifice must still be our watchword and must still be the watchword in thousands of humble homes, to come along at this moment,

when everyone knows that we are having to economise in various directions and when there are forms of expenditure of a humane kind which hon. Gentlemen opposite have asked for during the course of this Debate and to which we have had to say "No" because it could not be afforded, with a suggested cut in our revenue of £68 million which will be made up of a saving of 4s. in the pound in the wholesale price of garden ornaments, hand-painted trays, artificial fruit and French perfume, is to approach the situation with a total lack of reality. It shows a total lack of appreciation of what life is really like in some homes in Britain today which it should be our concern tonight to seek to alleviate in every possible direction.
I wish to make it quite clear that there are some items of Purchase Tax which I and many others would like to see not only reduced but abolished. If I were Chancellor of the Exchequer and were dealing with Purchase Tax I could, for a fraction of the sum which hon. Gentlemen by their Clause are proposing to give up, wipe out the Purchase Tax on all the outstanding essential articles used in the modest home. I suggest to hon. Gentlemen opposite that, in those circumstances, that is the sort of home we ought to be thinking about; that is the sort of home where the real pinch of the cost of living is being felt.
When the right hon. Gentleman comes to the Committee and has his fun about dusters, tape, and so on, he is enveloping the Debate in a smoke screen. The fact is that so carefully has this tax been adjusted to the real essential needs of the community that the revenue from these outstanding essential articles, which have not yet been exempted from tax under one heading or another, is now very small. If, as I believe, the right hon. Gentleman has studied the Schedules, giving the full details of Purchase Tax and the items in the groups and exemption, he must have been struck by the wide range of exemptions which already obtain in the humble domestic articles. He must know that the most important items like children's clothing, for example, are totally exempt from Purchase Tax and that some 75 per cent. of adult clothing is exempted under the utility scheme; 85 per cent. to 90 per cent. of the footwear, even high grade footwear is exempt. Utility clothes are


exempt, and, under the heading of haberdashery, the utility scheme again has the effect of bringing into the exemption class items like handkerchiefs, braces, and so on.
In the range of domestic textile articles there are utility towels and glass cloths and 90 per cent. of the production of this category of goods are exempt. In the case
of sheets 90 per cent. of them are utility and exempt from Purchase Tax; wool blankets, 96 per cent. already exempt from Purchase Tax. If we go into the kitchen and look at the items there we find that we have exempted cooking stoves, grates, wash boilers, coppers, brooms, brushes and babies' baths. We spent five years in weeding out from the Purchase Tax the range of things which really are essential. The impression given in the country of the great pressure of Purchase Tax on the modest home has been quite exaggerated. So much has it been exaggerated that I would like the Chancellor to make it one of his primary aims in his taxation policy to wipe out the rest of these items. It would not cost anywhere near £68 million—

Mr. Eccles: In this Budget it would cost £217 million. If we wipe out entirely one article in the 33⅓ per cent. class, under the terms of the Budget Resolution we must wipe out them all and that would cost £217 million. That is why half of the argument of the hon. Lady is nonsense.

Mrs. Castle: I am sorry that hon. Gentlemen opposite have been bound by the terms of this particular Budget Resolution because—[Laughter]—just a moment, because I would have liked them not to have had this alibi but to have been obliged to disclose their real hand. Then I do not think we would have found them putting up a fight for the wiping out of these last remaining few millions. Haberdashery is only running at £5, £6 or £7 million in toto. I do not think that their main fight would have been to remove the last vestiges of Purchase Tax from hardware, which is only costing about £4 million.
I do not think they would have bothered very much about razor blades, and so on; the whole taxation being paid on these essential toilet requisites is running to the tune of only £2 to £3 million

at this moment. I do not think they are concerned with that. If that was what they were concerned with, it would have been possible, under the terms of the Financial Resolution, for hon. Gentlemen opposite to put down a Motion for the total abolition of the 33⅓ per cent. Purchase Tax and ignored the 66⅔ and the 100 per cent.—ignored the garden ornaments, the gold and silver ware, the hand-painted trays and the French perfume. But they did not.

10.15 p.m.

Mr. Lyttelton: The hon. Lady is now erecting a perfectly defensible argument, and I give this pledge: If the Government will reduce by £15 million the Purchase Tax on the most essential things I will willingly ask leave to withdraw the proposed new Clause.

Mrs. Castle: I am delighted that the unanswerably of my arguments has so completely converted the right hon. Gentleman. I am delighted to know that he has dropped all the talk we heard in his speech, earlier, about the inequity of the 100 per cent. rate upon my and other people's cosmetics. The housewives of Great Britain are more genuinely concerned about the lino on the floor and getting basic essentials as cheaply as possible than with being wooed by right hon. and hon. Gentlemen opposite with talk of cheaper cosmetics. I am glad, therefore, that the right hon. Gentleman has come to have a greater sense of proportion.
My theme tonight is this: when hon. and right hon. Gentlemen opposite talk about this great shadow of Purchase Tax over ordinary working-class homes they are grossly exaggerating the real picture. I repeat, if the party opposite go into the Division Lobby tonight to vote for this proposed new Clause we shall make it clear to the housewives of Britain just whose taxes they are most concerned with.

Mr. Maclay: There have been a lot of interesting proposals made in the speech to which we have just listened, but upon reflection I prefer to alter "proposals" to "suggestions." I do not propose to follow them. The most interesting, of course, was that it would have been very much better had we been able to discuss specific details in this Debate this evening. We are working under considerable difficulties.


I shall detain the Committee for only a short time, and I will go straight into illustration, as far as the Chair will permit me, of one tax in one of the categories which the hon. Lady seemed to think we should not be daring to touch—the 66⅔ per cent. category.
The hon. Lady seemed to feel that in suggesting a reduction in that category we were catering for the luxury trades. If it can be shown that a tax is producing rapidly diminishing returns, that it is virtually destroying an ancient industry, and when that industry is one which has made British high quality products famous throughout the world, which has contributed in the past greatly to our export trade, and which is capable of doing it now and in the future, then I suggest there is a very strong case indeed for reducing that tax, and probably for eliminating it altogether.
The industry I am referring to specifically is the hand-woven tweed scarf and rug industry. That industry is, of course, of prime importance to the Highlands of Scotland. It has been conducted for years in cottages all over the Outer Isles, and in Orkney and Shetland. But it is not only a Highland industry. I think it is too often thought of as exclusively a Highland industry. A lot of very fine hand-loom weaving goes on south of the Highland line. If you, Colonel Ropner, will permit me, I shall illustrate my point very briefly by quoting what is happening today to one factory south of the Highland line, which for years past has been producing the very finest quality hand-woven tweed scarves and rugs and exporting them all over the world.
I said that diminishing returns should be one test. This factory in the first three months of 1948 paid in Purchase Tax about £568; in 1950, during the equivalent three months, it paid £169; and I am advised that in the present quarter it is very unlikely that it will pay more than £70. Its sales have gone down and down, the factory is quite unable to sell sufficient goods to pay its wage bill today, and the reason is solely that it is having to pay this very high rate of 66⅔ per cent. Purchase Tax in competition with utility goods and others.
It can be argued, and somebody might argue, that hand woven tweeds and

scarves are luxuries, but if we are going to call any fine British product of real handicraft a luxury we are really going too far. This kind of product has been valuable to us in the past, for it was that kind of product which built up our reputation as craftsmen throughout the world. I am told that this question has been argued before, but it is a long time since it was argued in detail; at least two years. The excuse was then given by the Front Bench opposite that, while they appreciated the need to keep this hand woven woollen industry going, it was extremely difficult administratively to reduce the tax on hand woven tweeds and other articles without getting into trouble with a lot of other goods, both home produced and foreign.
An indication was given by the Financial Secretary that the Government were studying the matter two years ago to see if something could be done. Nothing has happened, and I suggest that, no matter what administrative difficulties there may be in reducing or abolishing altogether this tax on hand woven tweeds, that job should be tackled, because it would be a great disaster to Scotland above all and to the United Kingdom as a whole if this industry was forced out of existence, as appears likely at the present rate of taxation.

Mr. Wade (Huddersfield, West): In considering this new Clause and the general principles which are raised by it, we must start with the assumption that the Purchase Tax as a form of raising revenue is a bad tax. If revenue has to be raised in this way, it can only be justified, in the first place, if the articles on which the tax is placed are luxuries, and, secondly, if it is a necessary part of our fiscal policy to discourage the purchase of these particular articles.
I should like to illustrate that point by referring to cricket gear. For reasons best known to the Chancellor, some cricket gear, such as leather bags used by cricketers, pay 100 per cent. tax, canvas bags pay 66⅔ per cent. and the remaining essentials for the game—bats, balls, stumps and so forth—pay 33⅓ per cent. I estimate, from figures supplied to me by the Federation of British Manufacturers of Sports and Games, that the amount of tax—I have excluded imported goods—levied on these articles amounts to approximately £160,000.
That is a very small sum from the point of view of the Chancellor and the Treasury, but to those who wish to enjoy playing cricket it is a very heavy burden. However necessary it may be to raise revenue, is it right that this healthy form of exercise, which is regarded as our great national game, should be taxed in this way, and to such an extent that many of our youths are no longer able to play this game? It is true that in the case of schools grants are made to the local educational authorities, but that is merely a case of taking money out of one Government pocket and putting it into another. The cost of cricket equipment is heavy. I do not propose to give a lot of details, but a good class cricket bat now costs 69s. 11d., and the price of a grade A ball has risen from 13s. 6d. to 36s. 6d.

The Temporary Chairman (Colonel Ropner): The hon. Gentleman is out of order when he directs his speech to the reduction of tax on specific articles.

Mr. Wade: I shall conclude my illustration by pointing out that some of this cricket equipment is liable to 100 per cent. Purchase Tax, and some to only 33⅓ per cent. I wish to make it clear that the M.C.C. inquiry committee and the British Federation, to which I have already referred, have gone to great trouble to satisfy themselves that the increased cost is not due to reasons other than Purchase Tax. In conclusion, I suggest that this is material because it is the kind of consequence arising from Purchase Tax. May I quote a letter from the president of the Huddersfield Cricket League in which he says—

The Temporary Chairman: The hon. Member endeavoured to put himself in order by saying he was giving an illustration, but he is really not keeping within the Rules of Order now.

Mr. Wade: In that case, Colonel Ropner, I will not refer to the letter, much as I should like to do so.
As I said earlier, if we are to justify this tax, it must, in the first case, be shown that the items covered are luxuries or comparative luxuries, and further, that it is a necessary part of our fiscal policy to discourage the purchase of those articles. The illustration which I have given
about cricket gear show that, in

this case, neither of those conditions are satisfied.

Sir W. Wakefield: The burden of the speech made by the hon. Lady the Member for Blackburn, East (Mrs. Castle), was, if I understood it aright, that under Socialism, austerity has to continue indefinitely, and that, m fact, a smokescreen had been laid over the Debate on this Clause by my right hon. Friend the Member for Aldershot (Mr. Lyttelton), who. I thought, most ably put the case for the need of a reduction. He showed that Purchase Tax is now out of date, and that its purpose and object no longer exist. He said that it ought to be abolished as soon as practicable. The hon. Lady opposite said that it would be impossible to get rid of Purchase Tax, because that would mean doing away with a large and substantial amount of revenue.
I suggest to the Committee that it is not impossible, and that there is a gross waste of expenditure taking place at present. We had an example this afternoon, in answer to a Question, of some £70,000 being completely wasted in Portsmouth. If that and many other examples, of which hon. Members are fully aware, were taken into account, and if expenditure were reduced, then the reductions in Purchase Tax for which we ask in this Clause could be achieved.
10.30 p.m.
I want to draw attention to one point to which my right hon. Friend referred, namely, the effect of this tax on our overseas trade. I have here an example of a firm in my constituency, which may be taken as typical of many cases hon. Members, certainly on this side, and I imagine on the other side as well, can give. This firm is doing precisely the work my right hon. Friend suggested; they are doing an important and valuable export trade in high quality goods. They say:
Our home sales have been rendered extremely difficult by reason of the 66⅔ per cent. Purchase Tax. Buyers in great numbers come forward to buy our goods, but, in the great majority of cases, decline to go through with the purchase because they are not willing to pay Purchase Tax.
What is the result? Failure to sell in
the home market. Anybody in business knows that one cannot have a flourishing export trade unless one has a sound home trade to back that up. The firm further
say:


Unless some relief is afforded we shall be faced with the necessity of closing down our works and putting over 80 people out of work. They are highly skilled men, specially trained for our industry, and, once dispersed, it will be extremely difficult to bring them together again and the valuable export business we are still doing will be lost to the country.
That is the effect of the Purchase Tax on our export trade. I would suggest that if this tax were reduced, increased revenue, not less revenue, would accrue to the Exchequer. We have so many anomalies in this Purchase Tax. I have a whole sheaf of them, but I will not weary the Committee with them, because they are well known. It is utter nonsense for the hon. Lady opposite to say that Purchase Tax is being successfully graded. I have examples which show there are grave anomalies existing. I would like to suggest to the Chancellor of the Exchequer that an advisory committee be set up to go into the whole question of Purchase Tax to see what can be done to prevent our export trade being lost, as my right hon. Friend and I have illustrated. We already have an Imports Advisory Committee. The many anomalies which exist could be thoroughly examined and many grievances which exist in business could be done away with. At present, when industries make representations to the Treasury about the difficulties they have under the anomalies of Purchase Tax, no notice is taken. I think that is simply because there are no people in the Treasury who appreciate and understand the difficulties which affect business in Purchase Tax.
My right hon. Friend drew attention to the difficulty of production in the gas industry, and showed how utterly impossible it is for the industry to plan with Purchase Tax going up and down. An advisory committee would be able to give advice on this matter. I hope the right hon. and learned Gentleman will carefully consider such a proposal. In conclusion, I would suggest that the action of the Chancellor of the Exchequer in devaluing the pound last autumn has had an effect on Purchase Tax which I am sure he did not foresee, and that is another reason why Purchase Tax is out of date and ought to be gradually eliminated.
I want to quote a few sentences from a speech by the chairman of one of

our great companies, which put the position in a nutshell. He said:
The line of demarcation between utility and general merchandise was, and continues to be, usually one of price. Below a given figure of production costs, the article is deemed to be utility and therefore free of purchase tax. Above that level it is non-utility, and subject to tax at a rate of anything up to 100 per cent. Where devaluation is beginning to have a sinister effect on the plan is that in such cases a rise in the cost of raw materials makes it impossible for the manufacturer to produce utility goods at a profit under a ceiling price, and there is no alternative but to bring the article into the non-utility category. The consequent rise in retail price as a result of the operation of purchase tax is out of all proportion, to the rise in the cost of raw materials, or to any real value.
That statement was made by Lord Woolton, and if any man knows what he is talking about in business, it is Lord Woolton. I would draw those remarks of a wise business man to the notice of the Chancellor of the Exchequer. Here is another example in support of the new Clause which we, on this side of the Committee, have put down. If the Chancellor will only look at the various sane, sensible, business-like arguments put forward he will agree that what we on this side of the Committee are proposing is in the best interest of the national economy.

Mr. Braine: We have heard a number of instances from hon. Members on both sides of the Committee, and no doubt as the evening wears on we shall hear many more, of the way in which Purchase Tax is bearing down on various industries and is having a damaging and detrimental long-term effect. One which occurs to me—and I must, at the outset of my remarks declare that I have a personal interest here—is the fur trade, which my right hon. Friend the Member for Aldershot (Mr. Lyttelton) has mentioned. This is a trade which contributes substantially to the economy of the country. It has done so for many centuries. But it is being literally taxed out of existence. There is a view that the fur trade is a luxury trade and is, therefore, less deserving of tax reductions than many other trades. That is a shortsighted and wholly misleading view. I think it is relevant to say that, before the war, measured in terms of value, the fur trade was the leading entrêpot trade of this country. Even now, despite the distraction of the war, it is a substantial dollar earner and I am advised that during the past three


years our exports have averaged annually something in the region of £10 million.
There is no reason at all why there should be a fur trade in this country. We have to import everything so we can export the finished products. Indeed there is no reason why the fur trade should not be centred in Paris, or Brussels, or New York, except that for more than three centuries skills and business organisation have gradually reached a peak of efficiency here, so that this country today is the centre of the world's fur trade. Yet since the early part of 1949, the trade has faced the gravest difficulties because of its inability to sell in the home market. I have a copy of a letter addressed by the trade's spokesman to the President of the Board of Trade, dated 12th August, 1949. It includes this statement:
Earlier in the year the position in the trade was serious; today we are faced with the stark possibility of the whole industry ceasing to exist at all unless an effective transfusion of life and hope can be made in the matter of weeks. It is the considered opinion of my Committee that an adjustment of the Purchase Tax can alone restore to the trade its health and virility.
The position has worsened since then, as is well known to the President of the Board of Trade.
Now, if this Clause is not accepted it will mean that non-utility furs will continue to bear Purchase Tax at the rate of 100 per cent. and that utility furs will continue to carry Purchase Tax at the rate of 33⅓ per cent. Tax at these rates is pricing furs out of the home market.
The Committee may be interested to know that utility furs are the only utility articles that carry Purchase Tax. Yet it is essential for the trade to have a substantial home market, for two reasons. The first is so that importers do not have to depend entirely upon exports to sell the whole of their collections. The existence of a home market is absolutely imperative to the fur trade because it needs stability, the trade itself being of such a fluctuating nature. The second reason, and one which I suggest will appeal to hon. Members on both sides of the Committee, is that by its means continuity of employment can be guaranteed to the skilled craftsmen in the industry and their skills in the dressing and dyeing and on the manufacturing sides of the industry can be maintained.
It has already been mentioned by my right hon. Friend that British furs have a world-wide reputation for quality, but that quality depends upon skills difficult to acquire and easy to lose. It is my contention that the present rates of tax are discouraging sales on the home market. In fact, they are doing more than that. They are actually acting as a disincentive to quality production, and all that that may mean to the future of a great British industry. Let me take one illustration. The production cost of the utility fur coat is £18.

The Temporary Chairman (Colonel Ropner): The hon. Member is in order in trying to illustrate the point he is making, but he will be out of order if he continues to address his remarks to one article only.

Mr. Braine: I bow to your Ruling, Colonel Ropner. But it is quite clear that unless the Chancellor is prepared to make substantial concessions before the next fur trade season begins, in September, it will collapse in a comparatively short time, leading to widespread unemployment and loss of skills which, in turn, will lead to the long-term decline of the industry—and that at a time when German competition is on the increase. More than that, the Chancellor will lose revenue. Indeed, he is already losing revenue. One manufacturer of my acquaintance told me that in the first quarter of this year he paid, in Purchase Tax, the sum of £168, whereas usually he paid somewhat in the region of £7,000 to £8,000. It is quite clear that the present incidence of the tax is causing the Chancellor to lose revenue. Most men at some time of their lives are either led or prodded into buying their wives a fur coat—

The Temporary Chairman: The hon. Member is out of order.

Mr. Braine: I was only going to suggest that the Chancellor might well go down in history as the man who has made it impossible for any man to buy his wife a fur coat.

10.45 p.m.

The Temporary Chairman: The hon. Gentleman cannot resume his speech unless he brings his remarks in order.

Mr. Gammans: All I want to say on this subject can be briefly summarised


by asking the Chancellor two questions. First, are we now to understand that Purchase Tax is a permanent feature of our taxation system? Up till now there has been a sort of fiction that it was something brought in during the war to discourage buying and to combat inflation. Is that fiction now to be dropped, because, if so, I think the Chancellor should say so? This is the first Budget in the new Parliament. Here is a tax that raised £300 million. Is there no hope whatsoever of this tax disappearing, or even being reduced, because, if not, then I think the Chancellor should "come clean" and tell the Committee and the country.
The second question is this: Ought not the right hon. and learned Gentleman to give up the pretence that this tax affects only luxuries? The hon. Lady the Member for Blackburn, East (Mrs. Castle)—my distinguished constituent—made a very gallant attempt to pretend that it did not affect the working-class home, but the only man who does not pay Purchase Tax is a man who lives up a tree, wrapped up in a utility blanket—

Hon. Members: Eating nuts.

Captain Crookshank: Groundnuts.

Sir W. Darling: There is a tax of 33⅓ per cent. on rose bushes.

Mr. Gammans: He is asked to pay a tax when he comes down to earth. He is asked to pay a tax when he cleans his teeth or washes the back of his neck or rides a bike or writes a letter or shaves. It is exactly four years since I was in the jungles of Borneo, interviewing, on behalf of His Majesty's Government, the head-hunters of Borneo. I wondered whether they were the only people left on earth who would not have to pay Purchase Tax, but I am sure the right hon. and learned Gentleman would charge them tax on their blow-pipes.
It is ridiculous to suggest that this tax is any longer a tax on luxuries. Will the Chancellor therefore pay special attention to these points: has this tax come to stay? Is it a permanent tax on the whole community? If the answer is, "Yes," then I suggest that this tax so reeks of anomalies in every conceivable direction that he or his successor should make some attempt to iron out the anomalies.

The Temporary Chairman: Squadron-Leader Cooper.

Mr. Ellis Smith: The reinforcements have arrived!

Squadron-Leader A. E. Cooper: I am sure that both sides of the Committee were very amused by the few words from the hon. Lady the Member for Blackburn, East (Mrs. Castle). Her facts and the arguments she adduced may have been somewhat faulty, but it was quite obvious to see and sense her embarrassment. One can sense, too, the embarrassment of hon. Members opposite: it is like that of a man whose pyjama-string breaks in the hem.
Recently, I put down a Question to the Chancellor, asking what steps he proposed to take to reduce the cost of living and I want to deal with this question of Purchase Tax on lines somewhat different from those taken up by my hon. Friends. I believe Purchase Tax is a very serious item in the cost of living. I should have thought that it would have been one of the first duties of the Chancellor of the Exchequer, in framing his Budget proposals, to have brought forward such measures as would have brought about reduction in the cost of living. I was interested to hear the hon. Lady the Member for Blackburn, East, reveal some sense of sympathy for those enjoying the lowest incomes in this country. It is somewhat refreshing for hon. Members opposite to take that view in this Parliament; it has for so long been left to right hon. and hon. Members here to press the case of the lowest paid workers the whole time through—and we shall continue in that capacity. When I inquired of the Chancellor I received a reply—frankly, I thought it was an impudent reply—to a serious Question. The right hon. and learned Gentleman merely referred me to the Budget statement. Well, I was here and listened throughout that ordeal, but I could find no proposals for reducing the cost of living.
Here is an opportunity for the right hon. and learned Gentleman to bring about some relief for these people who have to enjoy the least of this country's good things, Purchase Tax taking, as it does, sums from 5s. to 10s. a week. That is what is taken from the lowest


paid workers. It acts as a disincentive to saving, and is one of the prime reasons why there are considerable demands nowadays for higher wages.
If this Clause were accepted, the effect would immediately be to reduce some of the pressure to which I have referred; there would be an incentive to saving, and there would, in effect, be an increase in wages without increasing the costs of production. Money in people's pockets is the thing they need. At present the Chancellor, in one form or another, extracts practically all they have. I can tell the hon. Lady the Member for Blackburn, East, who appears to have little knowledge of what happens in working-class homes these days, that both in my own election campaign, and subsequently, I made considerable researches into how these people are affected. [HON. MEMBERS: "Oh."] Yes, I made a whole lot of inquiries. [HON. MEMBERS: "These people!"] I quite appreciate this hilarity. It is a question of "empty vessels …"
The figures may interest hon. Members opposite. They can confirm them by a simple letter to the Postmaster-General. In the weekly savings withdrawals the average amount drawn out is not £5 or £10, as the Chancellor so euphemistically says, to buy all those things in the shops. These sums are 5s., 10s. and 15s., and when I asked people why they were encashing their savings they said, simply, "We cannot make ends meet unless we do it." If this Clause is accepted we can, without inflation, make it possible for people who are now forced to draw out this money, to make ends meet otherwise. For that reason alone, and heaven knows that is strong enough, the Clause ought to be accepted.

Mr. Jay: As my hon. Friend the Member for Blackburn, East (Mrs. Castle) said, more or less correctly, to accept the Clause would cost £70 million of the total of £400 million of which Opposition Amendments wish to deprive us. I am not sure whether this Clause is one of those which the Opposition mean seriously and which they will really carry out if they come to power, or whether it is one of those that the hon. and gallant Member for North-West Bristol (Lieut.-Commander Braithwaite) described as "an annual parade" a few nights ago. It would be a help to the Committee and the country

if the Opposition would tell us which falls into which category. Nevertheless, I think that the Clause, whether a parade or not, has been extremely useful in that it has enabled us to have a wide and interesting Debate on the whole subject of the Purchase Tax. I believe, quite candidly, that the Purchase Tax is intrinsically a less good tax than either Income Tax, Profits Tax, or Death Duties.
The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) suggested that we should look back at the history, of the tax. Having said that, he did not, in fact, look back at the history, but I think his suggestion is a very good one, and I think that it is worth looking back in that way. Before the war, as the hon. Gentleman the Member for Chippenham (Mr. Eccles) quite correctly reminded us, the Labour Party generally resisted high indirect taxation on necessities on the ground that they were regressive, and bore very hardly on the poor man. But—and the hon. Member for Chippenham did not remind us of this at the same time—the Tory Party constantly advocated a general sales tax, as it was then called, on the ground that it would throw the burden of taxation more widely over the whole community and not confine it to the payer of Income Tax who, in those days, was a comparatively wealthy member of the community. That, moreover, was—

Mr. Pickthorn: Mr. Pickthorn (Carlton) rose—

The Deputy-Chairman: If the Minister does not give way. the hon. Member must not continue to stand.

Mr. Pickthorn: Will the Minister allow me to ask a question? Having said that the Tory Party constantly recommended a sales tax, will he now give the details and date when that happened?

Mr. Jay: No, Sir; it is common knowledge, just as it is common knowledge—and I am not attempting to dispute what the hon. Member for Chippenham said—that we constantly opposed regressive taxation. Moreover, that was in the days when there were heavy indirect taxes not merely on beer and tobacco, but also on tea and sugar, which we abolished last year, apart from the Imperial Preference. There were also, in those days, no food subsidies which are, of course, a negative indirect tax


on necessities and which act progressively in exactly the same sense as the hon. Member for Chippenham pointed out that the indirect tax is regressive.
It was following that controversy over the sales tax before the war—[An HON. MEMBER: "When?"] I am coming to the date. It was following that controversy over the sales tax, before the war, that Sir John Simon, as he then was, as Chancellor, in April, 1940, in the Conservative and Liberal Coalition of that day, introduced the Purchase Tax. Most of our thoughts were fixed on other matters at that time and so it is, perhaps, now worth recalling what that proposal was in its original form, in April, 1940. His proposal was a flat rate of tax, not differentiating at all between the less necessary and the more necessary types of goods. It was, in fact, the sales tax, although the name was altered.
11.0 p.m.
It covered, too, all the groups falling under the tax: all clothing, all boots, shoes, newspapers, books and periodicals. The right hon. Gentleman the Member for Aldershot said that Purchase Tax was originally designed to prevent luxury spending. I wonder whether he remembered when he said that that the original tax was to fall on all clothing, boots and shoes without any utility scheme. Sir John Simon excused the regressive nature of the tax by saying it was impossible—and it was a commonly used argument—to raise large sums if necessities were excluded, though, in fact, we have been able to exclude large numbers of necessities included at that time, and to raise much more revenue.
These proposals, at the beginning of 1940, were severely criticised by the Labour Party, and the right hon. Gentleman has asked for the history. As a result, after the formation of the Coalition Government in May, 1940, two very important changes were made to meet the main criticisms. First of all, children's boots and shoes, newspapers and books were excluded altogether. Secondly, the flat rate of 25 per cent. was abandoned, and two rates—16⅔ per cent. and 33⅓ per cent.—were applied to the more necessary and the less necessary goods respectively. Sir Kingsley Wood, introducing the amending Measure later that year, pointed out that food, water, gas, electricity,

transport, education, coal and children's boots and shoes were now exempt from the tax. He defended the tax at that time on the ground that 86 per cent. of consumers' ordinary spending was not affected by the tax, and he said it could not, therefore, be a severe burden on the cost of living of the mass of the people.
After that, important changes were made later in the war which converted this tax still further from being a regressive one on goods of general consumption towards being a tax on less necessary articles and luxuries. First, the utility scheme was introduced, which put a large part of the supplies of clothes, boots, shoes, furniture and household textiles outside the range of the tax altogether. Second, the differentiation between the rates applying to the more necessary and the less necessary goods was carried very much further. That process was continued by my right hon. and learned Friend's predecessor as Chancellor, and by my right hon. and learned Friend himself in the Budget of 1948, when we overhauled the whole tax so as to minimise its effect on the cost of living, while retaining it as a disinflationary tax calculated to restrain spending. The right hon, Gentleman the Member for Aldershot said the purpose of the tax was to be anti-inflationary and to restrain spending. Surely he would not argue that there is no need for anti-inflationary measures today, because the Opposition is constantly telling us that there is an inflationary pressure facing us at the present time, and they go so far as to tell us we are suffering from overfull employment.

Mr. Henry Strauss: The hon. Gentleman says that we say the country is suffering from overfull employment. He remembers, does he not, that the first person in this House to use that expression was the present Leader of the House, who used it at a Press conference in August, 1947, two months before it was used by any Conservative Member?

Mr. Jay: Yes, Sir, but the hon. Gentleman the Member for Chippenham used it in a letter to "The Times" last week. When we were reorganising Purchase Tax in 1948 we sought to reduce the rates on those goods which seriously affected the cost of living of the wage earner and left the rates high on goods like furs, jewellery, cosmetics, and so on, which surely


cannot be held to influence the cost of living of the wage earner.
We also sought deliberately to use the tax as an instrument of planning—I know the right hon. Gentleman does not like the word "weapon"—particularly in encouraging exports in industries like the motor car industry, where, surely, it cannot be argued that the Purchase Tax has been a severe deterrent to exports. In making that differentiation we gave a net relief amounting to £39 million a year to the taxpayer. Incidentally, I remember that at the time we were attacked by the "Economist" for doing that on the grounds that we were weakly giving way to pressure and abandoning our disinflationary policy. That shows how newspaper criticisms change from time to time. As a result of those changes in 1948 we now have a tax which, despite some imperfections of detail, is surely not unsuitable for an inflationary period.
Today, quite apart from food, gas, electricity, water, and so forth, utility clothes—apart from furs and fully-fashioned stockings, which the right hon. Gentleman forgot—utility boots and shoes, utility household textiles and utility furniture are exempt. The hon. Lady the Member for Blackburn, East gave some figures of the extent of the supplies of these goods which are in the utility field, but I doubt even now whether it is fully realised how high the percentages are. According to the latest figures, which mainly relate to the second half of 1949, 96½ per cent. of leather boots and shoes are in the utility class; hosiery, 87 per cent.; cotton, linen, rayon and nylon cloth, 59 per cent.; wool cloth, 78 per cent.; towels, 73 per cent.; sheets, 76 per cent.; cotton blankets, 86 per cent.; wool blankets, 92, and so forth.
It is, of course, just for those reasons that a combined reduction in Purchase Tax and in food subsidies at the present time would occasion a rise in the cost of living and that the reductions proposed by the Clause would fall, as the hon. Lady said, very largely on the least necessary goods which do not enter to any significant extent into the cost of living of ordinary families. Actually, of the £300 million or so of Purchase Tax revenue raised in 1949 as much as £175 million came from the following items: non-utility clothes, textiles and fabrics, wireless sets, toilet requisites, perfume and

lipsticks, and so on, stationery and office requisites, and passenger motor cars.

Mr. I. J. Pitman: When the hon. Gentleman mentions stationery does he not realise that the tax on stationery is passed on to all these articles which he claims are exempt? Business stationery is 95 per cent. of stationery and bears virtually all the Purchase Tax in that field, and that tax is recovered in these utility blankets, in food, and in all cost of living items of the people. The whole of that big sum of tax on stationery is actually borne by others than the payers, including the working people in their homes.

Mr. Jay: I think not to a very significant extent. The big items are non-utility clothes, passenger cars, radios, and one or two others. It is on these items that the larger part of the £70 million of revenue, which this Clause wants us to relinquish, would, in fact, come. The right hon. Gentleman the Member for Aldershot told us that if we voted against this proposal he would tell the country that we had voted for higher prices of all manner of things. If I wanted to use that sort of language, I could say that if hon. Members opposite vote for this proposal we shall tell the country that they are voting against the reductions in Income Tax. The right hon. Gentleman should not utter threats if he does not want us to retaliate. When one takes this proposal for remitting Purchase Tax revenue with the Opposition's other proposals for reductions in food subsidies, one is unable to see how any cut in the cost of living could be achieved in this fashion. If we carried out both these proposals the prices of expensive clothing, motorcars and wireless sets, would come down, and the prices of bread and milk would increase.
The right hon. Gentleman said he did not like the cost-of-living index. The fact is that this is a case where, as the statistics did not support his argument, he took refuge in abusing the statistics. Complete abolition of the Purchase Tax and reduction of the food subsidies by the same amount would raise the cost of living by six or seven points. A cut in the food subsidies equivalent to the amount involved in the proposal we are discussing would raise the cost of living by about two points. He quoted a family as paying something like 4s. 0d. in Purchase Tax. We can all argue about these


average and sample families. I was interested in an article in "Picture Post" of 3rd June, which gave a family budget of a railwayman in Darlington, with a wife and three children, who was living on £4 15s. 0d. a week wages, plus 10s. 0d. I do not know whether the facts were exactly correct, but what struck me about that family budget was that there was, so far as I could are, no single item in it on which Purchase Tax is charged other than soap. A cut of £70 million in the food subsidies would have added 2s. 9d. a week to the budget of that family.
We therefore resist this Clause at present because, in our view, it is still necessary to withstand inflationary forces, and because this proposal, particularly if it was combined with any proposal for cuts in food subsidies, would transfer the burden of the cost of living from those fairly well off to those less well off; it would mean relieving to some extent the better off section of the community. I was asked whether this tax was intended to be permanent. I have not the power of peering into the indefinite future; but in the less distant future, when inflation is no longer our problem, the time will doubtless come when rates of Purchase Tax can be moved downwards and exemptions increased.
11.15 p.m.
It is, in my view, a less good tax than the Income Tax, Profits Tax, and Death Duties. Nevertheless, after the changes we made in 1947 and 1948, many representations were made to us from industry that frequent changes in the tax were undesirable, and that a little stability would be a good thing. The right hon. Gentleman accused us of variability, and of infirmity of purpose in frequently changing the rates Well, it was precisely for this reason, among others, that we decided not to make any detailed changes in the Finance Act, 1949, or the Finance Bill of 1950. There was great force in that argument, and I believe it establishes the case for not making changes this year, and, therefore, for not accepting this Clause tonight.
I hope, however, that when, in the future, the need to restrain spending becomes less paramount in our economic policy there will be a chance for a revision of this tax. Such a revision might very well maintain the principle on which we of the Labour Party insisted

successfully in 1940, that Purchase Tax should be, at least to this extent, a luxury tax, that the greater part of the revenue should be raised from the less essential goods.

Captain Crookshank: Perhaps I may be allowed just to say a few words before we come to the expected division. We certainly have discussed this matter in a very interesting form this year. Owing to the Chancellor's having thought of a method in which Purchase Tax could be raised in Debate, we have carried on, not in the Dutch auction style, but in the illustrative manner, and a great many topics have, therefore, been incidentally raised. I hope—the hon. Gentleman did not say so—that the particular points of detail which were raised by my hon. Friends will be considered by the Government.
I think that the hon. Gentleman really lives in a world of his own. We know that that world is one where he knows best, but he seems to be quite out of touch with the effect of the Purchase Tax on innumerable households. Indeed, he seemed to question the quotation which my right hon. Friend made when he said that it had been estimated that in the case of the lower income families—that is to say, families of four with an income under £500 a year—the amount of tax was 4s. 6d. a week. The hon. Gentleman rather derided that statement: but after all, it was taken from the Report entitled "Facts about the British Economy" by the E.C.A. mission, and not from "Picture Post"—a very much more reliable body, I should have thought. "Picture Post" may be all right or it may not, but the family it mentioned does not, apparently, brush its teeth.

Mr. Jay: May I just point out to the right hon. and gallant Gentleman that I was only suggesting that the figure quoted was, I think, an average one for all families with under £500 a year? Therefore, one cannot say precisely how accurate that would be for one particular group of, say, £5 a week or less.

Captain Crookshank: That is what the hon. Gentleman said, but the fact remains that it is a burden, and while it is all very well the Government and their supporters trying to make out that it is really only a luxury tax—supported


by the "Daily Herald" about every three weeks—it is not so. I do not want to quote a lot of things, but perhaps I may be allowed to pray in aid what the Chairman of Woolworth's said about it. Whatever else may be said about that great organisation, it does not really cater in the most luxurious class of goods or for the wealthier section of the community. I presume we are all agreed about that. The Chairman said:
I think it appropriate to repeat the contention I uttered last year—the terrific burden the consumer public bears in the matter of Purchase Tax, increasing as it does the cost, not only of essential goods, but also of semi essential goods.
That is said by one who, after all, is in touch with what one may call the generality of the population, and certainly not only the highest income groups.
What I was sorry about in the hon. Gentleman's speech was that, while he gave us the history of the Purchase Tax and reminded us of the time it was instituted—and I myself was in his position at that time, so I remember it very well—he hardly dealt at all with any of the matters raised in the Debate. I do not remember this story that a sales tax was part of the Tory policy a few years before the war and the hon. Gentleman is quite unable to give any instance where an official Amendment on behalf of the Conservative Party was put to a Finance Bill in those years. If they were in power and if that was their policy they would have presumably done something to carry it out. It would not have been left to back benchers to move Amendments on a most important point of policy. The whole thing is absolutely nonsense.
The argument deployed about this tax today by my right hon. and hon. Friends, and notably in the speech about fur, which was "run out," is that owing to the heavy incidence of tax even on some of the luxury goods we are in danger of losing trade in the export market. I do not see why the hon. Gentleman does not deal with that point. Surely it is not only of vital importance to maintaining our export trade. If we begin to lose that, what becomes of their full employment policy? Purchase Tax at the present high level is endangering the very foundation of their policy as they propagate it on all possible occasions. What is more, the Government

have admitted that to be the case, because in this Bill they have reduced the Purchase Tax on high priced cars. What have they done that for? Surely it is to maintain a certain market for high priced cars in this country in order that the export market in these high priced cars may also be maintained. If that is not the reason, I should like the Chancellor of the Exchequer to tell me what is the reason. But, of course, that is the reason. They already see the red light in this case. And what applies to high priced cars applies equally well in other cases. Does the hon. Gentleman wish to intervene?

Mr. Jay: I was not saying that it did not apply to high-priced cars. I was contesting the argument that it applies equally everywhere else.

Captain Crookshank: The hon. Gentleman may contest it, but he did not say anything about it in his speech, and it has been the burden of many of the observations on this side. The point of a Debate is to have such points answered.
My hon. Friends, perhaps a little more foreseeing than the gentlemen in Whitehall, fear that that may happen in the case of other goods and other markets, and that is one of the reasons, and no mean reason, why we ask to have this Clause inserted in the Bill. The hon. Gentleman then went on to say that if the Government accepted this Clause it would mean that it would be impossible to reduce the Income Tax. I agree with that, but he must have a very short memory because we were told all through the Debate on petrol—which I do not wish to go into, of course—that it was the concession on petrol which was going to cancel out Income Tax. How does this come into the picture at all? The hon. Gentleman has hardly dealt with the points raised, but I have more hope of the Chancellor of the Exchequer. He has been listening to this Debate, and he has noted the points, even if the hon. Gentleman did not trouble to answer them, and I put it most seriously on behalf of my right hon. and hon. Friends that we are alarmed at the continued high Purchase Tax from the point of view of employment in this country and the maintainance of our export trade. It is a burden, and it is no good trying to pretend that it is only a luxury tax.
All the figures show that luxury goods are by far the smallest proportion. The largest amount of tax is obtained from semi-necessities. I admit there are a lot of commodities outside the range. But the list of things which my right hon. Friend the Member for Aldershot read out—I will not repeat it now; they are all on record and are fresh in the minds of hon. Members—did touch every single family in this country. We feel that the time has come to make a start in reducing the Purchase Tax. We do not know whether it is the Government's intention that it should stay on for ever. But we say that it should not, and we want to start reducing it. Obviously, a tax of this magnitude cannot be swept away in one Finance Bill. We see that, of course, but we do think that a start can be made by chipping pieces off it.
I suspect that if our new Clause were put into the Bill there would be very few complaints from industrialists about the reduction of the tax. I hope that the Government will pay keen attention to all that has been said in the Debate, and that before very long we may press the matter to a Division and settle the issue.

Sir S. Cripps: The right hon. and gallant Gentleman has invited me to say a word on one or two points, and it would not be courteous if I were not to respond to that invitation. He asked a question about the reduction of the Purchase Tax on motor cars, that is, on the expensive motor car. The right hon. and gallant Gentleman will have observed that, while we have reduced that tax, we have not reduced it to nothing. We have brought it down to the same rate as that on other motorcars. It is true that from time to time it is found in other matters that certain manufactures may be affected by a particular tax of this kind. That is a matter which we have watched very carefully, and as far as we are aware there is at present no other case which will suffer from that particular danger. Were they to do so there is, the right hon. and gallant Gentleman knows, power to make adjustments of various kinds in the tax.
But the evidence of full employment, and the good volume of exports at present have shown that at the moment, at any rate, it is not having any very serious effect from that point of view. So far as the question of its incidence is concerned,

one could go on arguing that for ever. There is obviously a very large section of goods, such as motorcars and several others which have been mentioned, which do not come into the cost of living and with which one cannot deal as making the ordinary person in the £500 a year class pay much more for his cost of living. There are some goods remaining among those bearing Purchase Tax, as my hon. Friend said, which do come into the cost of living. There is some element in it; but the main element in it is the luxury, or the semi-luxury, non-essential type of goods.
From the point of view of anti-inflationary policy that is exactly the type of goods of which, I think, everyone will agree that we want to restrict the purchase. We want to concentrate upon necessities, and not to waste our resources upon things which are not so necessary. In an inflationary situation that is the type of restraint that is required. No hon. Member has suggested that on the Budget we have £70 million too much surplus. There has been not one word to that effect. If we make a reduction the loss in revenue would mean that there would have to be some alternative tax.

Viscount Hinchingbrooke: Reduce Government expenditure.

11.30 p.m.

Sir S. Cripps: We have been into all that argument, not this evening, but on another occasion. I am making the submission that to preserve the necessary balance of the Budget, it would be necessary to substitute some other tax. I do not think that that would create a very easy task for anyone, or lead to a very successful result.
We therefore believe that this tax, as it has been developing in the last few years, and in 1947 and 1948 particularly, has now become a tax which is not, broadly speaking, regressive in its character, and has become a tax which for the purposes of the present time is a suitable way of raising money. What will happen in the future, as my hon. Friend has said, if we get into a deflationary situation or anything of that kind will have to be dealt with by whoever is responsible for the situation then, and nobody can foretell now what is likely to be done as regards taxation. We have always said that the whole purpose of a


Budget is to adjust itself to the economic circumstances of the time, and that it must be kept flexible, and this tax, like every other, must also be kept flexible. I would ask the Committee to proceed to a Division if they feel it is necessary, and to reject the new Clause.

Mr. E. Martin Smith: I will not keep the Committee long on this interesting Debate. We have heard a lot of constructive arguments from this side of the Committee, but we have not heard one constructive answer from the other side. There is one point which has not been mentioned sufficiently yet. When, eventually, the Government see their way to reducing Purchase Tax, what is to happen to the retailer? What about the small shopkeeper? Something must be done to relieve his position when a reduction in Purchase Tax takes place. It is coming sometime, and there must be some solution.
Although hon. Members opposite may think they understand what happens with people like that, they have no idea of the difficulties of the small shopkeepers who have to contend with all this mass of regulations and snowstorms of instructions. They have a very difficult task to perform. When Purchase Tax is altered they get more difficulties to contend with. Hon. Members opposite do not bother about the small shopkeeper. They are

not even bothering to listen tonight. In time the small shopkeeper will realise that it is we on this side of the Committee who bother about them. Perhaps I know more about them than many hon. Members opposite. I have seen these men trying to contend with the difficulties which are put in their way by the rules and regulations issued by the Government. They have many difficulties, and many of them have told me that though they are honest men and intend to continue to be honest, their difficulties today are so great that they cannot keep up with the regulations which are forced on them.

What I am asking the Chancellor to do is this; when he eventually sees the sense of our argument, as we hope he will—and if he does not, the country will—we hope he will also see that these small shopkeepers have a proper chance of dealing with these regulations, and that when Purchase Tax is reduced they are not the ones who suffer most. I ask the right hon. and learned Gentleman to consider this matter very seriously.

Mr. Whiteley: rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 288; Noes, 280.

Division No. 35.]
AYES
[11.36 p.m.


Acland, Sir Richard
Burke, W. A.
Diamond, J.


Adams, Richard
Burton, Miss E.
Dodds, N. N.


Albu, A. H.
Butler, H. W. (Hackney, S.)
Donnelly, D.


Allen, A. C. (Bosworth)
Callaghan, James
Donovan, T. N.


Anderson, F. (Whitehaven)
Carmichael, James
Driberg, T. E. N.


Attlee, Rt. Hon. C. R.
Castle, Mrs. B. A.
Dugdale, Rt. Hon. J. (W. Bromwich)


Awbery, S S.
Champion, A. J.
Dye, S.


Ayles, W. H.
Chetwynd, G. R
Ede, Rt. Hon. J. C.


Bacon, Miss A.
Clunie, J.
Edwards, John (Brighouse)


Baird, J.
Cocks, F. S.
Edwards, Rt. Hon. N. (Caerphilly)


Balfour, A.
Coldrick, W.
Edwards, W. J. (Stepney)


Barnes, Rt. Hon. A. J.
Collick, P.
Evans, Albert (Islington, S. W.)


Bartley, P.
Collindridge, F.
Evans, E. (Lowestoft)


Bellenger, Rt. Hon F. J.
Cook, T. F.
Evans, S. N. (Wednesbury)


Benson, G.
Cooper, G. (Middlesbrough, W)
Ewart, R.


Beswick, F.
Cove, W. G.
Fernyhough, E.


Bevan, Rt. Hon. A. (Ebbw Vale)
Craddock, George (Bradford, S.)
Field, Capt. W. J.


Bing, G. H. C.
Crawley, A.
Finch, H. J.


Blackburn, A. R.
Cripps, Rt. Hon. Sir S
Fletcher, E. G. M. (Islington, E.)


Blenkinsop, A.
Crosland, C. A. R.
Follick, M.


Boardman, H.
Crossman, R. H. S.
Foot, M. M.


Booth, A.
Cullen, Mrs. A.
Forman, J. C.


Bottomley, A. G.
Daines, P.
Fraser, T. (Hamilton)


Bowden, H. W.
Darling, G. (Hillsboro')
Freeman, J. (Watford)


Bowles, F. G. (Nuneaton)
Davies, A. Edward (Stoke, N.)
Freeman, Peter (Newport)


Braddock, Mrs. E. M.
Davies, Ernest (Enfield, E.)
Gaitskell, Rt. Hon. H. T. N


Brockway, A. Fenner
Davies, Harold (Leek)
Ganley, Mrs. C. S.


Brook, D. (Halifax)
Davies, R. J. (Westhoughton)
Gilzean, A.


Brooks, T. J. (Normanton)
Davies, S. O. (Merthyr)
Glanville, J. E. (Consett)


Broughton, Dr. A. D. D.
de Freitas, Geoffrey
Gooch, E. G.


Brown, George (Belper)
Deer, G.
Greenwood, A. W. J. (Rossendale)


Brown, T. J. (Ince)
Delargy, H. J.
Greenwood, Rt. Hn. Arthur (Wakefield)




Grenfell, D. R.
Mack, J. D.
Shinwell, Rt. Hon. E


Gray, C. F.
McKay, J. (Wallsend)
Shurmer, P. L. E.


Griffiths, D. (Rother Valley)
Mackay, R. W. G. (Reading, N.)
Silverman, J (Erdington)


Griffiths, Rt. Hon. J. (Lianelly)
McLeavy, F
Silverman, S. S. (Nelson)


Griffiths, W. D. (Exchange)
MacMillan, M. K. (Western Isles)
Simmons, C. J.


Gunter, R. J.
McNeil, Rt. Hon. H.
Slater, J.


Hale, J. (Rochdale)
MacPherson, Malcolm (Stirling)
Smith, Ellis (Stoke, S.)


Hale, Leslie (Oldham, W.)
Mainwaring, W. H.
Snow, J. W.


Hall, J. (Gateshead, W)
Mallalieu, E. L. (Brigg)
Sorensen, R. W.


Hall, Rt. Hn. W. Glenvil (Colne V'll'y)
Mallalieu, J. P. W (Huddersfield, E.)
Soskice, Rt. Hon. Sir F


Hamilton, W. W.
Mann, Mrs. J.
Sparks, J. A.


Hannah, W.
Manuel, A. C.
Steele, T.


Hardman, D. R.
Marquant, Rt. Hon. H. A.
Stewart, Michael (Furham, E.)


Hardy, E A.
Mathers, Rt. Hon. George
Stokes, Rt. Hon. R R.


Hargreaves, A.
Mellish, R. J
Strachey, Rt. Hon. J.


Harrison, J.
Messer, F.
Strauss, Rt. Hon. G. R. (Vauxhall)


Hayman, F. H.
Middleton, Mrs. L.
Summerskill, Rt. Hon. Edith


Henderson, Rt. Hon. A. (Rowley Regis)
Mikardo, Ian
Sylvester, G. O.


Herbison, Miss M.
Mitchison, G. R.
Taylor, H. B. (Mansfield)


Hewitson, Capt. M.
Moeran, E. W.
Taylor, R. J. (Morpeth)


Hobson, C. R.
Monslow, W.
Thomas, D E. (Aberdare)


Holman, P.
Moody, A. S.
Thomas, George (Cardiff)


Holmes, H. E. (Hemsworth)
Morgan, Dr. H. B.
Thomas, I O. (Wrekin)


Houghton, Douglas
Morley, R.
Thomas, I. R. (Rhondda, W.)


Hoy, J.
Morris, P (Swansea, W.)
Thorneycroft, Harry (Clayton)


Hubbard, T
Morrison, Rt. Hon. H. (Lewisham, S.)
Thurtle, Ernest


Hughes, Emrys (S. Ayr)
Mort, D. L.
Timmons, J


Hughes, Hector (Aberdeen, N.)
Moyle, A.
Tomlinson, Rt. Hon. G


Hughes, Moelwyn (Islington, N.)
Mulley, F. W.
Turner-Samuels, M.


Hynd, H. (Accrington)
Murray, J. D.
Usborne, Henry


Hynd, J. B. (Attercliffe)
Nally, W.
Vernon, Maj. W F


Irvine, A. J. (Edge Hill)
Neal, H.
Viant, S. P


Irving, W. J. (Wood Green)
Noel-Baker, Rt. Hon. P. J
Wallace, H. W


Janner, B.
Oldfield, W. H
Watkins, T. E


Jay, D. P. T.
Oliver, G. H
Webb, Rt. Hon M. (Bradford. C.)


Jeger, G. (Goole)
Orbach, M.
Weitzman, D.


Jeger, Dr. S. W. (St. Pancras, S.)
Padley, W. E.
Wells, P. L (Faversham)


Jenkins, R. H.
Paling, Rt. Hon. Wilfred (Dearne V'lly)
Wells, W. T (Walsall)


Johnson, James (Rugby)
Paling, Will T. (Dewsbury)
West, D. G.


Johnston, Douglas (Paisley)
Pannell, T. C.
Wheatley, Rt. Hn. John (Edinb'gh, E.)


Jones, D. T. (Hartlepool)
Pargiter, G. A.
White, Mrs. E. (E. Flint)


Jones, Frederick Elwyn (West Ham, S)
Parker, J.
White, H (Derbyshire, N. E.)


Jones, Jack (Rotherham)
Paton, J.
Whiteley, Rt. Hon W


Jones, William Elwyn (Conway)
Pearson, A.
Wigg, George


Keenan, W.
Peart, T. F.
Wilcock, Group-Capt. C. A. B.


Kenyon, C.
Poole, Cecil
Wilkes, L.


Key, Rt. Hon. C. W.
Popplewell, E.
Wilkins, W. A


King, H. M.
Porter, G.
Willey, F. T. (Sunderland)


Kinghorn, Sqn.-Ldr. E.
Price, M Philips (Gloucestershire, W.)
Willey, O. G. (Cleveland)


Kinley, J.
Proctor, W. T
Williams, D. J. (Neath)


Lee, F. (Newton)
Pryde, D. J
Williams, Ronald (Wigan)


Lee, Miss J. (Cannock)
Pursey, Comdr. H
Williams, Rt. Hon. T Don Valley)


Lever, L. M. (Ardwick)
Rankin, J.
Williams, W T (Hammersmith, S.)


Lever, N. H. (Cheetham)
Rees, Mrs. D.
Wilson, Rt. Hon J. H (Huyton)


Lewis, A. W. J. (West Ham, N.)
Reeves, J.
Winterbottom I. (Nottingham C.)


Lewis, J. (Bolton, W.)
Reid, T. (Swindon)
Winterbottom, R E (Brightside)


Lindgren, G. S.
Reid, W. (Camlachie)
Wise, Major F J


Lipton, Lt.-Col. M.
Rhodes, H.
Woodburn, Rt. Hon. A


Logan, D. G.
Richards, R.
Woods, Rev G S


Longden, F. (Small Heath)
Robens, A
Wyatt, W. L


McAllister, G.
Roberts, Goronwy (Caernarvonshire)
Yates, V F


MacColl, J. E.
Robertson, J. J. (Berwick)
Younger, Hon. Kenneth


McGhee, H. G.
Rogers, G. H. R. (Kensington, N)



McGovern, J
Ross, William (Kilmarnock)
TELLERS FOR THE AYES:


McInnes, J.
Shackleton, E. A. A.
Mr. Royle and Mr Kenneth Robinson.




NOES


Aitken, W. T
Bennett, W. G. (Woodside)
Bullus, Wing-Commander E. E


Alport, C. J. M.
Bevins, J. R. (Liverpool, Toxteth)
Burden, Squadron-Leader F. A


Amery, J. (Preston, N.)
Birch, Nigel
Butcher, H. W.


Amory, D. Heathcoat (Tiverton)
Bishop, F. P.
Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)


Arbuthnot, John
Black, C. W
Carr, L. R. (Mitcham)


Ashton, R. (Chelmsford)
Boles, Lt.-Col. D. C. (Wells)
Carson, Hon. E


Assheton, Rt. Hon. R. (Blackburn, W.)
Boothby, R.
Channon, H


Astor, Hon M,
Bossom, A. C
Churchill, Rt. Hon. W S.


Baker, P.
Bowen, R.
Clarke, Col. R. S. (East Grinstead)


Baldock, J. M.
Bower, N.
Clarke, Brig T H (Portsmouth, W.)


Baldwin, A E.
Boyd-Carpenter, J. A.
Clyde, J. L.


Banks, Col. C
Bracken, Rt. Hon. Brendan
Colegate, A.


Baxter, A. B
Braine, B.
Cooper, A. E. (Ilford, S.)


Beamish, Maj. T. V. H.
Braithwaite, Lt.-Comdr J. G.
Cooper-Key, E. M


Bell, R. M.
Bromley-Davenport, Lt.-Col. W.
Corbett, Lieut.- Col. U. (Ludlow)


Bennett, Sir P (Edgbaston)
Browne, J. N. (Govan)
Craddock, G B (Spelthorne)


Bennett, R F. B. (Gosport)
Buchan-Hepburn, P. G. T.
Cranborne, Viscount







Crookshank, Capt. Rt. Hon H. F. C.
Hyde, H. M.
Prior-Palmer, Brig. O.


Cross, Rt. Hon. Sir R.
Hylton-Foster, H. B
Profumo, J. D.


Crosthwaite-Eyre, Col O E.
Jeffreys, General Sir G
Raikes, H. V.


Crouch, R. F
Jennings, R.
Rayner, Brig R.


Crowder, Capt. John F. E. (Finchley)
Johnson, Howard S. (Kemptown)
Redmayne, M.


Crowder, F. P. (Ruislip-Northwood)
Jones, A. (Hall Green)
Remnant, Hon. P.


Cundiff, F. W.
Joynson-Hicks, Hon. L. W.
Renton, D. L. M.


Cuthbert, W. N.
Kaberry, D.
Roberts, P. G. (Heeley)


Darling, Sir W. Y. (Edinburgh, S.)
Kerr, H W. (Cambridge)
Robertson, Sir D. (Caithness)


Davidson, Viscountess
Kingsmill, Lt.-Col. W. H.
Robinson, J Roland (Blackpool, S)


Davies, Nigel (Epping)
Lambert, Hon. G.
Robson-Brown, W. (Esher)


de Chair, S.
Lancaster, Col. C. G.
Rodgers, J. (Sevenoaks)


Deedes, W. F.
Langford-Holt. J.
Roper, Sir H.


Digby, S. Wingfield
Law, Rt. Hon. R. K.
Ross, Sir R. D. (Londonderry)


Dodds-Parker, A. D.
Leather, E. H. C.
Russell, R. S.


Donner, P. W
Legge-Bourke, Maj. E. A. H.
Ryder, Capt. R. E. D


Douglas-Hamilton, Lord M
Lennox-Boyd, A. T.
Sandys, Rt. Hon. D.


Drewe, C
Lindsay, Martin
Savory, Prof. D. L.


Dugdale, Maj. Sir T. (Richmond)
Linstead, H N.
Scott, Donald


Duncan, Capt. J. A. L.
Liewellyn, D.
Shepherd, W. S. (Cheadle)


Dunglass, Lord
Lloyd, Rt. Hon. G. (King's Norton)
Smiles, Lt.-Col. Sir W.


Duthie, W. S.
Lloyd, Maj. Guy (Renfrew, E.)
Smith, E. Martin (Grantham)


Eccles, D. M.
Lloyd, Selwyn (Wirral)
Smithers, Peter H. B. (Winchester)


Eden, Rt. Hon. A.
Lockwood, Lt.-Col. J. C.
Smithers, Sir W (Orpington)


Elliot, Lieut.-Col. Rt. Hon. Walter
Longden, G. J. M. (Herts, S. W.)
Smyth, Brig. J. G. (Norwood)


Erroll, F. J
Low, A. R. W.
Snadden, W. McN.


Fisher, Nigel
Lucas, Major Sir J. (Portsmouth, S.)
Soames, Capt. C.


Fletcher, W. (Bury)
Lucas, P. B. (Brentford)
Spearman, A. C. M


Fort, R.
Lucas-Tooth, Sir H
Spence, H. R. (Aberdeenshire, W)


Foster, J. G.
Lyttelton, Rt. Hon. O.
Spens, Sir P. (Kensington, S.)


Fraser, Hon. H. C. P. (Stone)
McAdden, S. J.
Stanley, Capt. Hon. R. (N. Fyide)


Fraser, Sir I. (Lonsdale)
McCallum, Maj. D.
Stevens, G. P.


Fyfe, Rt. Hon. Sir D. P. M.
McCorquodale, Rt. Hon. M. S
Steward, W. A. (Woolwich, W.)


Gage, C. H.
Macdonald, A. J. F. (Roxburgh)
Stewart, J. Henderson (Fife, E.)


Galbraith, Cmdr T D (Pollok)
Macdonald, Sir P. (I. of Wight)
Stoddart-Scott, Col. M.


Galbraith, T. G. D. (Hillhead)
Mackeson, Brig, H. R.
Storey, S.


Gammans, L. D
McKibbin, A.
Strauss, Henry (Norwich, S.)


Garner-Evans, E. H. (Denbigh)
McKie, J. H. (Galloway)
Stuart, Rt. Hon. J. (Moray)


Gates, Maj E. E.
Maclay, Hon. J. S.
Summers, G. S


George, Lady M Lloyd
Maclean, F H. R,
Sutcliffe, H.


Glyn, Sir R.
MacLeod, lain (Enfield, W.)
Taylor, C. S. (Eastbourne)


Gomme-Duncan, Col. A
Macpherson, N. (Dumfries)
Taylor, W. J. (Bradford, N.)


Gridley, Sir A.
Maitland, Comdr. J W.
Teeling, William


Grimond, J.
Marlowe, A. A. H
Thomas, J. P. L. (Hereford)


Grimston, Hon J (St Albans)
Marples, A. E.
Thompson, K. P. (Walton)


Grimston, R V. (Westbury)
Marshall, D. (Bodmin)
Thompson, R. H. M. (Croydon, W.)


Harden, J. R. E
Marshall, S. H. (Sutton)
Thorneycroft, G. E. P. (Monmouth)


Harris, F. W (Croydon, N.)
Maude, A. E. U. (Ealing, S.)
Thornton-Kemsley, C. N


Harris, R. R. (Heston)
Maudling, R.
Tilney, John


Harvey, Air-Codre A. V. (Macclesfield)
Medlicott, Brigadier F.
Touche, G. C.


Harvey, I (Harrow. E.)
Mellor, Sir J.
Turton, R. H.


Hay, John
Molson, A. H. E.
Tweedsmuir, Lady


Head, Brig. A H
Moore, Lt.-Col. Sir T.
Vane, W. M. F.


Heald, L F
Morrison, Maj. J. G. (Salisbury)
Vaughan-Morgan, J. K.


Heath, Col. E R
Morrison, Rt. Hon. W. S. (Cirencester)
Vosper, D. F.


Henderson, John (Cathcart)
Mott-Radclyffe, C. E.
Wade, D. W.


Hicks-Beach, Maj W W
Nabarro, G.
Wakefield, E. B. (Derbyshire, W.)


Higgs, J M C
Nicholls, H.
Wakefield, Sir W. W. (St. Marylebone)


Hill, Mrs. E. (Wythenshawe)
Nicholson, G.
Walker-Smith, D. C.


Hill, Dr. C. (Luton)
Nield, B. (Chester)
Ward, Hon. G. R. (Worcester)


Hinchingbrooke, Viscount
Noble, Comdr. A. H. P
Ward, Miss I. (Tynemouth)


Hirst, Geoffrey
Nugent, G. R. H.
Waterhouse, Capt. C.


Hogg, Hon. Q
Nutting, Anthony
Watkinson, H.


Hollis, M. C.
Oakshott, H. D.
Watt, Sir G. S. Harvie


Holmes, Sir J Stanley (Harwich)
Odey, G. W.
Webbe, Sir H. (London)


Hope, Lord J
O'Neill, Rt. Hon. Sir H.
Wheatley, Major M. J. (Poole)


Hopkinson, H. L. D'A.
Ormsby-Gore, Hon. W. D
Williams, C. (Torquay)


Hornsby-Smith, Miss P
Orr, Capt. L. P. S.
Williams, Gerald (Tonbridge)


Horsbrugh, Miss F.
Orr-Ewing, Charles Ian (Hendon, N.)
Williams, Sir H. G. (Croydon, E.)


Howard, G. R. (St. Ives)
Orr-Ewing, Ian L. (Weston-super-Mare)
Wills, G.


Howard, S. G. (Cambridgeshire)
Osborne, C
Wilson, Geoffrey (Truro)


Hudson, Sir Austin (Lewisham, N.)
Perkins, W. R. D.
Winterton, Rt. Hon. Earl


Hudson, Rt. Hon. R. S. (Southport)
Peto, Brig. C. H. M.
Wood, Hon. R.


Hudson, W. R. A. (Hull, N.)
Pickthorn, K.
York, C.


Hulbert, Wing-Cdr. N. J.
Pitman, I. J.
Young, Sir A. S L.


Hurd, A. R
Powell, J. Enoch



Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Prescott, Stanley
TELLERS FOR THE NOES:




Mr. Studholme and Major Conant.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 280; Noes, 288.

Division No. 36.]
AYES
[11.48 p.m.


Aitken, W. T.
Fraser, Hon. H. C. P. (Stone)
McKie, J. H. (Galloway)


Alport, C. J. M.
Fraser, Sir I. (Lonsdale)
Maclay, Hon. J. S.


Amery, J. (Preston, N.)
Fyfe, Rt. Hon. Sir D. P. M.
Maclean, F H R.


Amory, D. Heathcoat (Tiverton)
Gage, C. H.
MacLeod, lain (Enfield, W.)


Arbuthnot, John
Galbraith, Cmdr. T. D. (Pollok)
Macpherson, N. (Dumfries)


Ashton, H. (Chelmsford)
Galbraith, T. G. D. (Hillhead)
Maitland, Comdr. J. W


Assheton, Rt. Hon. R. (Blackburn, W.)
Gammans, L. D.
Marlowe, A. A. H


Astor, Hon. M.
Garner-Evans, E. H. (Denbigh)
Marples, A. E.


Baker, P.
Gates, Maj. E. E.
Marshall, D. (Bodmin)


Baldock, J. M.
Glyn, Sir R.
Marshall, S. H. (Sutton)


Baldwin, A. E.
Gomme-Duncan, Col. A.
Maude, A. E. U. (Ealing, S.)


Banks, Col. C.
Gridley, Sir A.
Maudling, R.


Baxter, A. B.
Grimond, J.
Medlicott, Brigadier F.


Beamish, Maj. T. V. H.
Grimston, Hon. J. (St. Albans)
Mellor, Sir J.


Bell, R. M.
Grimston, R. V. (Westbury)
Molson, A. H. E.


Bennett, Sir P. (Edgbaston)
Harden, J R. E.
Moore, Lt.-Col. Sir T


Bennett, R. F. B. (Gosport)
Harris, F. W. (Croydon, N.)
Morrison, Maj. J. G (Salisbury)


Bennett, W. G. (Woodside)
Harris, R. R. (Heston)
Morrison, Rt. Hon. W. S (Cirencester)


Bevins, J. R. (Liverpool, Toxteth)
Harvey, Air-Codre, A. V. (Macclesfield)
Mott-Radclyffe, C. E


Birch, Nigel
Harvey, I. (Harrow, E.)
Nabarro, G.


Bishop, F. P.
Hay, John
Nicholls, H


Black, C. W.
Head, Brig. A. H.
Nicholson, G


Boles, Lt.-Col. D. C. (Wells)
Heald, L. F.
Nield, B. (Chester)


Boothby, R.
Heath, Col. E. R
Noble, Comdr. A H. P


Bossom, A. C.
Henderson, John (Cathcart)
Nugent, G. R. H.


Bowen, R.
Hicks-Beach, Maj. W. W.
Nutting, Anthony



Higgs, J. M. C.
Oakshott, H. D.


Bower, N.
Hill, Mrs. E. (Wythenshawe)
Odey, G. W.


Boyd-Carpenter, J. A.
Hill, Dr. C. (Luton)
O'Neill, Rt. Hon. Sir H.


Bracken, Rt. Hon. Brendan
Hinchingbrooke, Viscount
Ormsby-Gore, Hon. W. D


Braine, B.
Hirst, Geoffrey
Orr, Capt. L. P. S.


Braithwaite, Lt.-Comdr. J. G
Hogg, Hon. Q.
Orr-Ewing, Charles Ian (Hendon, N.)


Bromley-Davenport, Lt.-Col. W.
Hollis, M C.
Orr-Ewing, Ian L. (Weston-super-Mare)


Browne, J. N. (Govan)
Holmes, Sir J. Stanley (Harwich)
Osborne, C.


Buchan-Hepburn, P. G. T.
Hope, Lord J.
Perkins, W. R. D.


Bullus, Wing-Commander E. E.
Hopkinson, H. L. D'A.
Peto, Brig. C. H. M


Burden, Squadron-Leader F. A.
Hornsby-Smith, Miss P.
Pickthorn, K.


Butcher, H. W.
Horsbrugh, Miss F.
Pitman, I. J.


Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
Howard, G. R. (St. Ives)
Powell, J. Enoch


Carr, L. R. (Mitcham)
Howard, S. G. (Cambridgeshire)
Prescott, Stanley


Carson, Hon. E.
Hudson, Sir Austin (Lewisham, N.)
Prior-Palmer, Brig. O


Channon, H.
Hudson, Rt. Hon. R. S. (Southport)
Profumo, J. D.


Churchill, Rt. Hon. W. S.
Hudson, W. R. A. (Hull, N.)
Raikes, H. V


Clarke, Col. R. S. (East Grinstead)
Hulbert, Wing-Cdr. N. J.
Rayner, Brig. R


Clarke, Brig. T. H. (Portsmouth, W.)
Hurd, A R.
Redmayne, M.


Clyde, J. L.
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Remnant, Hon. P


Colegate, A.
Hyde, H. M.
Renton, D. L. M


Cooper, A. E. (Ilford, S.)
Hylton-Foster, H. B.
Roberts, Emrys (Merioneth)


Cooper-Key, E. M.
Jeffreys, General Sir G
Roberts, P. G. (Heeley)


Corbett, Lieut.-Col. U. (Ludlow)
Jennings, R.
Robertson, Sir D. (Caithness)


Craddock, G. B. (Spelthorne)
Johnson, Howard S. (Kemptown)
Robinson, J. Roland (Blackpool, S.)


Cranborne, Viscount
Jones, A. (Hall Green)
Robson-Brown, W. (Esher)


Crookshank, Capt. Rt. Hon H. F. C.
Joynson-Hicks, Hon. L. W
Rodgers, J (Sevenoaks)


Cross, Rt. Hon. Sir R.
Kaberry, D.
Ropner, Col. L.


Crosthwaite-Eyre, Col. O. E.
Kerr, H. W. (Cambridge)
Ross, Sir R. D. (Londonderry)


Crouch, R. F.
Kingsmill, Lt.-Col. W H
Russell, R. S


Crowder, Capt. John F. E. (Finchley)
Lambert, Hon. G.
Ryder, Capt. R. E. D


Crowder, F. P. (Ruislip-Northwood)
Lancaster, Col. C. G.
Sandys, Rt. Hon D.


Cundiff, F. W.
Langford-Holt, J.
Savory, Prof D L.


Cuthbert, W. N.
Law, Rt. Hon. R. K
Scott, Donald


Darling, Sir W. Y. (Edinburgh, S)
Leather, E. H. C.
Smiles, Lt.-Col. Sir W.


Davidson, Viscountess
Legge-Bourke, Maj. E. A. H
Smith, E. Martin (Grantham)


Davies, Nigel (Epping)
Lennox-Boyd, A. T.
Smithers, Peter H. B (Winchester)


de Chair, S.
Lindsay, Martin
Smithers, Sir W (Orpington)


Deedes, W. F.
Linstead, H N.
Smyth, Brig. J. G. (Norwood)


Digby, S. Wingfield
Llewellyn, D.
Snadden, W. McN


Dodds-Parker, A. D
Lloyd, Rt. Hon. G. (King's Norton)
Soames, Capt C


Donner, P. W.
Lloyd, Maj. Guy (Renfrew, E.)
Spearman, A. C. M


Douglas-Hamilton, Lord M
Lloyd, Selwyn (Wirral)
Spence, H. R. (Aberdeenshire, W.)


Drayson, G. B.
Lockwood, Lt.-Col. J. C.
Spens, Sir P. (Kensington, S.)


Drewe, C
Longden, F (Small Heath)
Stanley, Capt. Hon. R. (N. Fylde)


Dugdale, Maj. Sir T. (Richmond)
Low, A. R. W.
Stevens, G. P.


Duncan, Capt. J. A. L.
Lucas, Major Sir J. (Portsmouth, S)
Steward, W. A (Woolwich, W.)


Dunglass, Lord
Lucas, P. B. (Brentford)
Stewart, J. Henderson (Fife. E.)


Duthie, W. S.
Lucas-Tooth, Sir H.
Stoddart-Scott, Col [...]


Eccles, D. M.
Lyttelton, Rt. Hon. O.
Storey, S.


Eden, Rt. Hon. A.
McAdden, S. J.
Strauss, Henry (Norwich, S.)


Elliot, Lieut.-Col. Rt. Hon Walter
McCallum, Maj. D.
Stuart, Rt. Hon. J (Moray)


Erroll, F. J.
McCorquodale, Rt. Hon. M. S.
Summers, G S


Fisher, Nigel
Macdonald, A. J. F. (Roxburgh)
Sutcliffe, H.


Fletcher, W. (Bury)
Macdonald, Sir P. (I. of Wight)
Taylor, C S. (Eastbourne)


Fort, R.
Mackeson, Brig. H. R.
Taylor, W J. (Bradford, N.)


Foster, J. G.
McKibbin, A.
Teeling, William







Thomas, J. P. L (Hereford)
Wade, D. W.
Williams, Gerald (Tonbridge)


Thompson, K. P. (Walton)
Wakefield. E. B (Derbyshire, W.)
Williams, Sir H. G. (Croydon, E)


Thompson, R. H. M. (Croydon, W.)
Wakefield, Sir W. W. (St. Marylebone)
Wills, G.


Thorneycroft, G. E. P. (Monmouth)
Walker-Smith, D. C.
Wilson, Geoffroy (Truro)


Thornton-Kemsley, C. N
Ward, Hon. G. R. Worcester)
Winterton, Rt. Hon Earl


Tilney, John
Ward, Miss I. (Tynemouth)
Wood, Hon. R


Touche, G. C
Waterhouse, Capt. C
York, C.


Turton, R. H
Watkinson, H.
Young, Sir A. S. L.


Tweedsmuir, Lady
Watt, Sir G. S. Harvie



Vane, W. M. F.
Webbe, Sir H. (London)
TELLERS FOR THE AYES:


Vaughan-Morgan, J. K
Wheatley, Major M. J. (Poole)
Mr. Studholme and Major Conant.


Vosper, D. F
Williams, C. (Torquay)





NOES


Acland, Sir Richard
Dye, S.
Keenan, W.


Adams, Richard
Ede, Rt. Hon. J. C.
Kenyon, C.


Albu, A. H
Edwards, John (Brighouse)
Key, Rt. Hon C. W


Allen, A. C. (Bosworth)
Edwards, Rt. Hon. N. (Caerphilly)
King, H. M.


Anderson, F. (Whitehaven)
Edwards, W. J. (Stepney)
Kinghorn, Sqn.-Ldr. E


Attlee, Rt. Mon. C. R.
Evans, Albert (Islington, S. W.)
Kinley, J.


Awbery, S. S
Evans, E. (Lowestoft)
Lee, F. (Newton)


Ayles, W H.
Evans, S. N. (Wednesbury)
Lee, Miss J. (Cannock)


Bacon, Miss A
Ewart, R.
Lever, L. M. (Ardwick)


Baird, J.
Fernyhough, E.
Lever, N. H. (Cheetham)


Balfour, A.
Field, Capt. W. J.
Lewis, A. W. J. (West Ham, N.)


Barnes, Rt. Hon A J
Finch, H. J.
Lewis, J. (Bolton, W.)


Bartley, P.
Fletcher, E. G. M. (Islington, E.)
Lindgren, G. S.


Bellenger, Rt. Hon. [...]
Follick, M.
Lipton, Lt.-Col. M


Benson, G
Foot, M. M.
Logan, D. G.


Beswick, F
Forman, J. C.
Longden, G. J. M. (Herts, S. W.)


Bevan, Rt. Hon A. (Ebbw Vale)
Fraser, T. (Hamilton)
McAllister, G


Bing, G. H. C.
Freeman, J. (Watford)
MacColl, J. E.


Blackburn, A. R.
Freeman, Peter (Newport)
McGhee, H. G.


Blenkinsop, A.
Gaitskell, Rt. Hon. H. T. N
McGovern, J.


Boardman, H
Ganley, Mrs. C. S.
McInnes, J.


Booth, A.
Gilzean, A.
Mack, J. D.


Bottomley, A. G.
Glanville, J. E. (Consett)
McKay, J. (Wallsend)


Bowden, H. W.
Gooch, E. G.
Mackay, R. W. G. (Reading, N.)


Bowles, F. G. (Nuneaton)
Greenwood, A. W. J. (Rossendale)
McLeavy, F.


Braddock, Mrs. E. M.
Greenwood, Rt. Hn. Arthur (Wakefield)
MacMillan, M. K. (Western Isles)


Brockway, A. Fenner
Grenfell, D. R.
McNeil, Rt. Hon. H.


Brook, D. (Halifax)
Grey, C. F.
MacPherson, Malcolm (Stirling)


Brooks, T. J. (Normanton)
Griffiths, D. (Rother Valley)
Mainwaring, W. H.


Broughton, Dr. A. D. D.
Griffiths, Rt. Hon. J. (Llanelly)
Mallalieu, E. L. (Brigg)


Brown, George (Belper)
Griffiths, W. D. (Exchange)
Mallalieu, J. P. W. (Huddersfield, E.)


Brown, T. J. (Ince)
Gunter, R J.
Mann, Mrs J.


Burke, W. A.
Hale, J. (Rochdale)
Manuel, A. C.


Burton, Miss E.
Hale, Leslie (Oldham, W.)
Marquand, Rt. Hon. H. A.


Butler, H. W. (Hackney, S.)
Had, J. (Gateshead, W.)
Mathers, Rt. Hon. George


Callaghan, James
Hall, Rt. HN. W. Glenvil (Colne V'll'y)
Mellish, R. J.


Carmichael, James
Hamilton, W. W.
Messer, F.


Castle, Mrs. B. A.
Hannan, W.
Middleton, Mrs. L


Champion, A. J.
Hardman, D. R.
Mikardo, Ian


Chetwynd, G. R.
Hardy, E A.
Mitchison, G. R


Clunie, J.
Hargreaves, A.
Moeran, E. W.


Cocks, F. S.
Harrison, J.
Monslow, W.


Coldrick, W.
Hayman, F. H.
Moody, A S.


Collick, P.
Henderson, Rt. Hon. A. (Rowley Regis)
Morgan, Dr. H. B.


Collindridge, F.
Herbison, Miss M.
Morley, R.


Cook, T. F.
Hewitson, Capt. M.
Morris, P. (Swansea, W.)


Cooper, G. (Middlesbrough, W.)
Hobson, C. R.
Morrison, Rt. Hon. H. (Lewisham, S.)


Cove, W. G.
Holman, P.
Mort, D. L.


Craddock, George (Bradford, S.)
Holmes, H. E. (Hemsworth)
Moyle, A.


Crawley, A.
Houghton, Douglas
Mulley, F. W


Cripps, Rt. Hon. Sir S
Hoy, J.
Murray, J. D.


Crosland, C. A. R.
Hubbard, T.
Nally, W.


Crossman, R. H. S
Hughes, Emrys (S. Ayr)
Neal, H.


Cullen, Mrs. A.
Hughes, Hector (Aberdeen, N.)
Noel-Baker, Rt. Hon. P. J.


Daines, P.
Hughes, Moelwyn (Islington, N.)
Oldfield, W. H.


Darling, G. (Hillsboro')
Hynd, H. (Accrington)
Oliver, G. H.


Davies, A Edward (Stoke, N.)
Hynd, J. B. (Attercliffe)
Orbach, M.


Davies, Ernest (Enfield, E.)
Irvine, A. J. (Edge Hill)
Padley, W. E.


Davies, Harold (Leek)
Irving, W. J. (Wood Green)
Paling, Rt. Hon. Wilfred (Dearne V'lly)


Davies, R. J. (Westhoughton)
Janner, B.
Paling, Will T. (Dewsbury)


Davies, S. O. (Merthyr)
Jay, D. P. T.
Pannell, T. C.


de Freltas, Geoffrey
Jeger, G. (Goole)
Pargiter, G. A.


Deer, G.
Jeger, Dr. S. W. (St. Pancras, S.)
Parker, J


Delargy, H. J.
Jenkins, R. H.
Paton, J.


Diamond, J.
Johnson, James (Rugby)
Pearson, A.


Dodds, N. N.
Johnston, Douglas (Paisley)
Peart, T. F.


Donnelly, D.
Jones, D. T. (Hartlepool)
Poole, Cecil


Donovan, T. N.
Jones, Frederick Elwyn (West Ham, S)
Popplewell, E.


Driberg, T. E. N.
Jones, Jack (Rotherham)
Porter, G.


Dugdale, Rt. Hon. J. (W. Bromwich)
Jones, William Elwyn (Conway)
Price, M. Philips (Gloucestershire, W.)







Proctor, W. T.
Steele, T.
West, D. G.


Pryde, D. J.
Stewart, Michael (Fulham, E.)
Wheatley, Rt. Hn. John (Edinb'gh, E.)


Pursey, Comdr. H.
Stokes, Rt. Hon. R. R
White, Mrs. E. (E. Flint)


Rankin, J.
Strachey, Rt. Hon. J.
White, H. (Derbyshire, N. E.)


Rees, Mrs. D.
Strauss, Rt. Hon. G. R. (Vauxhall)
Whiteley, Rt. Hon. W.


Reeves, J.
Summerskill, Rt. Hon. Edith
Wigg, George


Reid, T. (Swindon)
Sylvester, G. O.
Wilcock, Group-Capt. C. A. B.


Reid, W. (Camlachie)
Taylor, H. B. (Mansfield)
Wilkes, L.


Rhodes, H.
Taylor, R. J. (Morpeth)
Wilkins, W. A.


Richards, R
Thomas, D. E. (Aberdare)
Willey, F. T (Sunderland)


Robens, A.
Thomas, George (Cardiff)
Willey, O. G. (Cleveland)


Roberts, Goronwy (Caernarvonshire)
Thomas, I. O. (Wrekin)
Williams. D. J. (Neath)


Robertson, J. J. (Berwick)
Thomas, I. R. (Rhondda, W.)
Williams, Ronald (Wigan)


Rogers, G. H. R. (Kensington, N.)
Thorneycroft, Harry (Clayton)
Williams, Rt. Hon. T. (Don Valley)


Ross, William (Kilmarnock)
Thurtle, Ernest
Williams, W. T. (Hammersmith, S.)


Shackleton, E. A. A.
Timmons, J.
Wilson, Rt. Hon. J. H. (Huyton)


Shinwell, Rt. Hon. E.
Tomlinson, Rt. Hon. G.
Winterbottom, I. (Nottingham, C.)


Shurmer, P. L. E.
Turner-Samuels, M.
Winterbottom, R. E. (Brightside)


Silverman, J. (Erdington)
Usborne, Henry
Wise, Major F. J


Silverman, S. S. (Nelson)
Vernon, Maj. W. F.
Woodburn, Rt. Hon. A


Simmons, C. J.
Viant, S. P.
Woods, Rev. G. S


Slater, J.
Wallace, H. W.
Wyatt, W. L


Smith, Ellis (Stoke, S.)
Watkins, T. E.
Yates, V. F.


Snow, J. W.
Webb, Rt. Hon. M. (Bradford, C.)
Younger, Hon. Kenneth


Sorensen, R. W.
Weitzman, D.



Soskice, Rt. Hon. Sir F.
Wells, P. L. (Faversham)
TELLERS FOR THE NOES:


Sparks, J. A.
Wells, W. T. (Walsall)
Mr. Royle and Mr. Kenneth Robinson.

To report Progress, and ask leave to sit again.—[Mr. Whiteley.]

Committee report Progress; to sit again on Thursday.

COPPER (BULK PURCHASE)

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Royle.]

11.59 p.m.

Mr. John Grimston: At this time of night I do not want to delay the House longer than is necessary, and I will therefore put my points as shortly as possible. They are very important points to the traders of this country, and, in particular, to those who are working in the export trade of all kinds of mechanical apparatus. The point I wish to put arises from a Question I addressed to the Minister of Supply. I asked him why he had increased the premium on copper which is charged to consumers in this country, above the figure previously charged. In other words, the Department had imposed a further charge or levy on British industry. The reply I got was that this charge was necessary to cover the various expenses of the Ministry, and that if I could show a means of reducing this charge without a loss of sterling copper the Minister would be ready to review it.
If I may, I will run over the general arguments which apply in this case, and in many others, against bulk buying of a

commodity as important as copper. I shall not dilate on these, but they should be included in the record. I must disclose my interest in this matter as I am engaged in the metal fabricating trade. That trade in this country has to pay more for its raw material than its foreign competitors have. That is the first charge against bulk buying in general. The second one is that under the present system prices vary more from day to day than they used to under the old free market. The third point is that the taxpayer has to pay for any mistakes made in Government buying, and mistakes have been made. I do not want to detain the House with details, but they are in the Report of the Committee of Public Accounts which I have here. The fourth point is that no provision is available to the manufacturers in respect of future orders. Many kinds of plant may be ordered today but not wanted for one, two or even more years ahead, and the facility of being able to buy raw material and fix its price now, and take delivery many months ahead, is one which the trade considers it is entitled to and used to have in the free market.
The fifth point is that in bad times manufacturers must buy the metal outright, and have no means of hedging it on the Exchange—in other words, of protecting themselves against a loss they foresee in the future. The effect of this—and it should weigh heavily with the present Government—is that in this industry it makes employment much more irregular than if there were a market.


In bad times men must be laid off, whereas if there was a market they could be employed on making for stock. The sixth point is that the averaging of prices throughout the country encourages the siting of factories in uneconomic positions. That is a very serious charge, and will one day come home to roost when costs need to be cut to the finest point possible.
Lastly, the Minister is only able to carry on this method of trading by valuing his stocks at current prices. That is all very well when prices are going up. The Minister himself knows very well that he has today stocks to the tune of tens of millions of pounds. It is very much in all our minds that if prices come down he will be landed with those stocks of metal and be unable to sell them at the prices he has paid for them himself.
Those are general criticisms, but there are two further ones I want to mention, that apply especially to copper. The first is that, under our present system, we are entirely dependent on the American market for our quotations. That is, perhaps, all right in normal times, when the whole world is in step, but, at the moment, there are two reasons which make it highly dangerous. The first is that the Americans are now becoming importers of copper. Previously, they were exporters. It is very much in our interests that we should control the price when we are to be the net sellers, rather than that the Americans should be able to control the price when they are net buyers. But there is one further important qualification. At the end of this month the tariff on copper entering the United States will very probably be re-imposed at a further £16 a ton. Most of us expect the American price will go up by something less than that total amount of £16. Under his present system the Minister will have to charge consumers in this country more for their copper because the Americans have put up their domestic tariff on their own imports.
That is surely the absolute and final absurdity of State trading. If the Americans put up the tariff on motorcars which we export to the United States, no one would dream of assuming that the Minister would want to put up the prices of motor cars in this country. Yet that is what he is doing over copper. He will have to put up copper in this

country because the Americans are imposing a duty on copper imported into their own country. That is what we all expect, and I feel confident that something of that kind will emerge in the next ten days.
I want to leave the Minister plenty of time to reply, and so I shall close soon, but I just want to refer to one basic criticism which, I think, must be made, and that is of the load that this method of buying and selling imposes on our manufacturers. Copper is a craftsman's metal. In Kipling's words:
Gold is for the mistress, silver for the maid; Copper for the craftsman cunning at his trade.
Copper is a marvellous metal with which to work, and enters into all kinds of mechanical contrivances which are exported from this country. The method for buying it which the Minister imposes on the trade is imposing a load of between £1 million and £1½ million per annum on our export industries—on the mechanical industries which are our basic export industries.
The Financial Secretary, in the Budget Debate a few days ago, talked about 1 per cent. as being a very little imposition to impose on exporters. I strongly suspect that the Financial Secretary has never had to export anything in his life, nor ever had to sell anything, because if he had he must know that it is the last few shillings
which get or lose orders. Every little added on or taken off the price makes the buyer at the other end reject or accept the article, when he compares its price with other tenders.
Our present price is not 1 per cent. different from the world price, but over 3 per cent., which, again, is imposed by the Ministry on the price of the raw material. This 3 per cent. is further increased in the process of manufacturing metal, because there are certain unavoidable losses to be taken into account, and also manufacturing losses, which are very high in the metal trade. All this is cumulative, and adds up to a further increase in the prices of our export products.
If the Minister continues as at present the effect will be that we shall lose a large part of our export trade, particularly in the sale of manufactured metals, to the Germans, whose trade is coming


back by leaps and bounds. I gave an example in the House only last week. They are going as hard as they can for this trade, which they want to capture for themselves. In this country we are working under an impossible load represented by the premium the Ministry are charging. If the Minister says that the trade is not very important, I suggest that he goes to Swansea, for example, where 300 men were dismissed only a month or so ago from a very important metal working plant because the export trade in their product had evaporated.
The particular difficulties which
the Minister faces boil down to two; first, the currency difficulty, and second, what he calls, the sterling copper difficulty. I am advised that there is no currency problem in this matter at all. The European Payments Union agreement seems to be well advanced. The rubber and tin markets have considerable experience already, and I believe it is a fact that the Bank of England itself no longer objects to the opening of the copper market now. One thing is certain however and that is that there is no such thing as sterling copper, or dollar copper. Copper is an element. It is Cu in chemistry, and not Cu with a little dollar sign below it, or a pound sign in front of it.
If the Minister tries to prevent one molecule of copper, mined perchance in Rhodesia, from going to America, he will find himself in an impossible difficulty. Can he not look at it in this way? So long as the dollar area as a whole is buying copper, and the sterling area as a whole is selling copper, then there can be no leak either of copper or of money by the opening of the copper metal market under the normal provisions of payment through approved sterling accounts, which would undoubtedly be made. The urgency of this arises under two heads: first, the probability of the American duty coming on in the next few days; and, second, the fact that the Minister's last chance of getting out of the basic copper market is with him today. Unless he gets out on a rising market, he will never get out without being faced with enormous losses. Minor problems will certainly remain, such as the disposal of stocks, currency dealings, and how to make the

special shapes needed available; but all these can be overcome.
What we want is a statement by the Minister that the objections which formerly prevented the re-opening of the London Metal Exchange, particularly the currency objection, now no longer operate; that the traditional London market, which was itself a considerable dollar earner before the war, will be allowed to re-open, and will be helped by the Minister to start. This will be to the great advantage of the whole range of mechanical export industries, all of which use copper.

12.14 a.m.

Mr. Charles Ian Orr-Ewing: I will be brief, and not keep the House, but I wish to make one small point about copper as it concerns cable makers. I know of a case in which 1,000 tons of copper were offered to a cable firm at £100 a ton. Of course, that could not be accepted on the present bulk buying scheme. It has to be bought at the prices laid down by the Ministry of Supply, which have varied from £107 a ton to about £140 after devaluation. The current price is £180. We are being
undersold in this trade by the Germans by no less than 30 per cent. We cannot compete if we have to pay for raw materials prices which are above the absolute minimum.
I urge the Minister to consider seriously whether he cannot reintroduce the efficiency which has already shown itself in the tin market. There, I know, prices have gone up and down, but in copper buying they have shown a tendency to go constantly and steadily up. I hope that the Minister will consider whether we cannot introduce a commodity market in copper again into this country. That, as my hon. Friend has said, would gain for us cheaper prices which would put us back into the export market and enable us to compete on fairer terms. It would also bring us valuable invisible exports.

12.15 a.m.

The Parliamentary Secretary to the Ministry of Supply (Mr. John Freeman): I cannot complain about the manner in which the two hon. Members who have spoken have raised this matter. There has been quite a friendly exchange between the hon. Member for St. Albans (Mr. J. Grimston) and myself and I invited


him, in reply to a question which he put to me some weeks ago, to go into this matter further and see if he could help us out of the difficulty in which we find ourselves, and which I will now state frankly to the House. The hon. Member has not so far shown me the way out. The major part of his speech was devoted to the general question of whether the bulk-buying of copper was, on the whole, advantageous.
I think it will be helpful to the House if I give an up-to-date statement of the Government views on this matter which have not been stated for some time; and if I become pressed for time the matter can be debated further on a subsequent occasion. The Government are not doctrinally wedded to the bulk-purchase of base metals. We inherited the system at the end of the war and have continued it, except in the case of tin, because we considered it, on balance, to be substantially advantageous. The advantages which we claim have been manifested so far have been these: first, it secured the maximum supply of much-needed metals at a time of shortage, which has been the position, on the whole, during the post-war period; second, it minimised the hard currency cost to this country; third, it facilitated, in time of shortage, the allocation of metal to those consumers Whose need was the greatest in the public interest.
In the early post-war years all those advantages, I think even hon. Members opposite will agree, were of paramount importance; and they were secured at moderate cost. Hon. Members who were not present at the Debate which took place on 26th May last year, may care to refer to the record of that Debate. I think that an unbiased reader of HANSARD would say that, on the whole, at any rate up to that time, the Government had established their case. The disadvantages have also been perfectly clear. The hon. Members for St. Albans and Hendon, North (Mr. C. I. Orr-Ewing) mentioned some of them, but I think that some of those they mentioned were of relatively less importance. In the main I should have thought the particular difficulties were the inability of the United Kingdom consumer to hedge and the risk of heavy losses by the United Kingdom Government on their trading account when the market begins to fall.
I think that hon. Members opposite will agree that I have stated these difficulties frankly and fairly. In the early post-war years these disadvantages were minimised owing to the scarcity of copper and pressure on the market. The House will remember that some months ago, I believe it may have been a year ago, the United Kingdom price differential, as against the United States price, became a serious handicap to United Kingdom manufacturers. The Government brought its price into line with the U.S.A. price and accepted the loss of income involved.
The present situation is that, as copper production increases, the advantages of Government buying become less, and the disadvantages become greater. But copper is not yet plentiful, and the price remains high; and the salient advantage, I should say, now is specifically the dollar saving. The disadvantage is the probability—not, I emphasise, a certainty—that, as supply and demand balance and the market begins to fall, the Government will face heavy accounting losses. It would suit the Ministry of Supply very well if we could get out of copper trading now, on the top of the market, and take to ourselves the credit and the profit of successful trading over the last five years without the odium of losses which may be incurred in the future. Unfortunately, we cannot see any way of doing this without the serious risk of a substantial loss of sterling copper and a corresponding increase in dollar expenditure.
Let me explain to the hon. Member for St. Albans why I say that. What are our sources of copper supply at present? First of all, practically the whole of the output of Northern Rhodesia, and that is about 200,000 tons in the year; second about 60,000 tons of special shapes and sizes from Canada and the United States; third, some 7,000 tons from miscellaneous sources all of which, I think, have already for this year been purchased in the first six months, and I believe I am right in saying we shall have no more of this; fourth, approximately 20,000 tons from unuseable scrap, which is refined on behalf of the Ministry of Supply abroad.
The 60,000 tons of special shapes and
sizes which come mainly from Canada are shapes and sizes which cannot be supplied from Northern Rhodesia before 1952; but, in addition to this, the electrolytic


refining capacity of the Northern Rhodesian companies is still too small for a sufficient quantity of electrolytic copper to be supplied from this source, so the Ministry of Supply is responsible for the electrolytic refining of 60,000 tons of Northern Rhodesian blister copper. This refining is put to tender in France, Belgium, Western Germany and the United States, and it is mostly done in the United States. The cost of that is of the order of half a million pounds a year, probably in dollars.
The success of this plan hinges on our taking the whole output of Northern Rhodesia, and if that arrangement were altered there would be the likelihood of the Rhodesians selling part of their output on the Continent of Europe, and quite possibly—a matter which may be put to the test shortly—at higher prices. We should still need the electrolytic copper and we should have to pick it up where we could. There might be a real difficulty of supply, because electrolytic copper is still relatively scarce, and certainly we should have the risk of having to purchase up to 60,000 tons in hard currency—that is to say 60,000 tons of electrolytic copper, not merely refined in a hard currency country, but coming from hard currency mines and, at the same time, allowing 60,000 tons of sterling copper to go elsewhere.
The cost of this at today's prices would be about £11 million, presumably in dollars. That is a risk which the Government are not prepared to take. If the hon. Member or his friends can put forward a scheme to overcome this difficulty—and I say this in all seriousness, because on other metals we have put similar points to the London Metal Exchange—we will consider it with sympathy and with a desire to meet the point which he is making. At present, I do not see how we can free the market either until our dollar balance is a great deal more secure than it is now, or until we are able to satisfy a much higher proportion of our needs of electrolytic copper from Northern Rhodesia.
I want to say one word on the subject of price, and particularly a word of some interest on the question of the American tariff, about which the hon. Member spoke just now. Once a case has been made out—it may be debatable, but we believe we have made a case out—for a

system of bulk purchase, there are only three things one can do about the price. One can either get the best bargain possible with the Rhodesians and sell to the consumer on a no profit, no loss, basis, whatever the price is; and that involves the risk of letting the United Kingdom price go substantially above the United States price; or one can agree to pay the United States price and sell again to the consumer on a no profit, no loss, basis at that price, plus an on-cost to cover our expenses; and that at least prevents British industry being placed at a serious disadvantage with its United States competitors.
Or, we could subsidise British industry by deliberately selling copper at below cost, even if we know that in doing so we are not liquidating stocks. The third of these alternatives the Government are not prepared to consider and of the first two I think it is abundantly clear that the majority of consumers would far rather have the second than the first. That is what we have been doing.
I would like to say, in answer to one of the hon. Member's points, that it is all very well talking about the great price differential; but, as I am now advised and as I calculate myself, the on-cost added to the American price, which is taken as the price f.a.s. New York, is computed on a costed basis and not calculated to make a profit on the Government's trading account. In fact, it means that when the metal is delivered to Birmingham, for instance, or wherever the consumer may be, the differential is very, very little indeed. There is, of course, in some cases a certain differential, but it is an extremely small one. If the hon. Member cares to put down a Question, I will willingly show him how that on-cost figure is calculated, and I think he will find there is nothing serious to criticise about it.
Reference has been made to the possibility of the re-imposition of the United States import duty on copper and the position it might interest the House to know, is this—that unless an Act is passed through Congress not later than the 30th of this month, waiving the duty for a further year, it is automatically re-imposed on 1st July. So far as we understand and are advised, it is the intention of the United States Administration, in conformity with the policy they have been


following, to pass that Act and to waive the duty; but owing to the congestion of business in Congress it does seem possible that it will not be through by 1st July and the duty may, therefore, be automatically re-imposed.
If the American import duty of 2 cents. per lb. were to be re-imposed at the beginning of next month, it is uncertain whether the United States export price would, in the end, reflect the full rise of 2 cents. or something less. But it is most unlikely that the American consumer would be prepared to pay the duty and it seems fairly safe to say that the price paid to producers outside the United States would, ultimately, be the American domestic price, less 2 cents.
If, therefore, the duty is re-imposed we consider that it would be quite wrong for the price paid by this country to the Rhodesian producer to include an extra 2 cents. on account of the element of duty in the United States domestic price. My right hon. Friend has, therefore, written to the Rhodesian producers inviting them to agree with him that a proper interpretation of our arrangements with them is that the price to us should be no more than the United States domestic price, less the import duty if it should be imposed. I am sure that the whole House will agree that this is the proper course.

Mr. J. Grimston: Mr. J. Grimston rose—

Mr. Freeman: I have only one minute left to me and I want to add this: there seems to me and to the Ministry to be a very real and serious difficulty in this danger of losing sterling metal and having to replace it with dollar metal. There are, of course, other advantages in favour of our bulk-purchase policy, but I admit that they are progressively becoming weaker as the disadvantages are. of course, tending to become stronger.
If we could get over the difficulty of losing sterling metal we would at least undertake to look with sympathy on any alternative suggestion. I do not say that we would not still take account of the other factors in the balance of advantage. But that is the salient point; and if the hon. Member or any of his friends on the Metal Exchange would care to come to us with a scheme which overcomes this difficulty, then we should give it sympathetic consideration, and I should not be surprised if, in the end, he and I found ourselves more nearly in agreement.

Question put, and agreed to.

Adjourned accordingly at Twenty-nine Minutes past Twelve o'Clock.